Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

TAMAR BRIDGE BILL

Lords amendments agreed to.

Oral Answers to Questions — HEALTH

The Secretary of State was asked—

General Practitioners

Mr. John Healey: What steps he is taking to improve access to general practitioners, with particular reference to areas with a low number of general practitioners per 1,000 population. [50976]

The Minister of State, Department of Health (Mr. Alan Milburn): We have introduced a range of initiatives, such as a salaried general practitioner scheme, that will be beneficial particularly in areas with low GP numbers.

Mr. Healey: I thank the Minister for his response, which was encouraging. However, is he aware that simply to bring our patient waiting list sizes down to the national average, we have to increase the number of GPs by one third in Rotherham, by one quarter in Barnsley and by one fifth in Doncaster? Is he aware that increasing GP numbers is one of the central objectives of the health action zone in the South Yorkshire coalfields? Will he therefore tell me what operating freedoms he is considering giving to health action zones to tackle the problem of GP numbers, and when he expects to reach a decision on the matter?

Mr. Milburn: I thank my hon. Friend for his question. Health action zones are currently working up their outline bids into full proposals, which we shall be examining very carefully. We want to ensure that the difficulties are plugged in all parts of the country, especially those with problems—which the Government have inherited—in recruiting GPs. I can tell my hon. Friend that his health authority has just agreed additional funding for a salaried GP post. I hope that that will be helpful. He will be aware that the Government have concluded negotiations with the British Medical Association to introduce a salaried GP scheme, and also to beef up the GP retainer scheme. As he will also be aware, many general practitioners have

worked in, but left, the national health service. The Government want to recruit them back into work, for the benefit of patients.

Mr. Alan Duncan: I look forward—I say rather unexpectedly—to doing battle with the Minister in the next year. I know that he had high hopes of promotion, which he well deserves. I can only assume that the Prime Minister had given him an early pledge.
Does the Minister agree with the BMA chairman that the extra GP trainee places will come on stream only in about 16 years' time? Moreover, the BMA says that the promised 7,000 extra doctors are those who are already doctors. What proportion of those 7,000 doctors will come from overseas? Does he agree with the BMA that we should use only United Kingdom trained doctors, and that importing doctors from overseas will not solve the problem?

Mr. Milburn: I had planned on saying that the hon. Gentleman's first remarks were unworthy of him, but perhaps they were not. The British Medical Association is wrong on the more substantive issue that he raised. Doctors do not grow on trees—they cost extra cash, which is precisely what the Government have provided in the comprehensive spending review. If we had not provided extra cash, we would not be able to recruit extra doctors or to give the go-ahead to a massive expansion in the number of GP medical students—which I hope that he will welcome.

Medical Negligence

Mr. Tam Dalyell: Pursuant to his answer of 23 June 1998, Official Report, column 491, what representations he has received on methods of reducing clinical negligence litigation. [50977]

The Minister for Public Health (Ms Tessa Jowell): We have received more than 120 replies to our call for ideas on how to reduce the threat of litigation in the national health service. The replies have come from a wide range of sources, including the health care and legal professions, and the NHS and patients. My officials are currently studying the replies to identify key issues and ideas that we can develop.

Mr. Dalyell: Are Ministers at all uneasy about the way in which some lawyers—not all—seem to encourage clients to take litigation against medical practices, and about the natural reaction of doctors and their colleagues, therefore, to practices defensive medicine, which may not be in the best interests of patients as a whole? Over the summer, will my hon. Friend and her lawyers look carefully at the submission by Lord Justice Sir Philip Otton—a complex document that I have given to the Department in the hope that legislation can be brought forward to overcome an increasing and delicate problem?

Ms Jowell: My right hon. Friend the Secretary of State has already met Sir Philip Otton. We shall consider his proposals. We want to avoid patients being led to believe that they have grounds for legal action. The risk of defensive medicine follows. We want to ensure that lawyers are kept out of the operating theatres and doctors are kept out of the courts. That is good for patients.

Hospitals (Clinical Performance)

Mr. Dennis Turner: What representations he has received on general practitioners' rights to information about the clinical performance of their local hospital. [50978]

Mr. Paddy Tipping: What representations he has received on access by (a) general practitioners and (b) patients to information about the clinical performance of their local hospitals. [50989]

Mr. Peter L. Pike: What plans he has to publish average clinical performance of hospitals by procedure. [50990]

The Secretary of State for Health (Mr. Frank Dobson): A wide range of people, including general practitioners and members of the public, have expressed strong support for our proposals to give patients and GPs a clear right to know about how their local NHS hospital is performing. As a first step, we shall publish hospital-based indicators in the autumn.

Mr. Turner: Does my right hon. Friend agree that it is essential in the modern, dependable national health service that we are seeking to build that patients and GPs should have access to information about the performance of their local hospitals? Should not the right to know be our clarion call?

Mr. Dobson: Yes indeed, I entirely agree with my hon. Friend. It is crucial that the information provided to GPs and local people is accurate, comparing like with like. Providing misleading information would be harmful not just to the hospital and the profession, but to the GPs and patients.

Mr. Tipping: Is it not the case that knowledge and information are power? Extending information to patients empowers them. That must be right, because they not only use the health service, but pay for it.

Mr. Dobson: It is certainly right in principle. People want, and are entitled, to know whether their hospital is performing up to national standards. People do not want to go shopping around and travel long distances for treatment, but they want to be assured that their local hospital is up to scratch. The information will help them.

Mr. Pike: Does my right hon. Friend agree that it is important that, when the information is published, on a hospital-by-hospital basis, improvements are made where there has been shown to be room for them? What role does he see for the Commission for Health Improvement in ensuring such improvements in the interests of patients and GPs?

Mr. Dobson: The crucial point is that local management and local doctors should know how their performance compares with national standards. If they are not up to the national standards, they should take steps to ensure that they get up to standard. The Commission for Health Improvement, while not quite a long stop, would not be the first organisation to be involved if the local management and local doctors were seen not to be

responding to the information that had been made available. Until now, most of the information has not been available, even to the hospital trust boards.

Mrs. Virginia Bottomley: I endorse a sensitive approach to providing information on clinical outcomes, especially considering the fact that some of the waiting list targets have been such a fiasco for the Government. What steps will the right hon. Gentleman take to reassure the research community, already affronted by the gratuitous cut in its budget, that a clumsy approach to naming and shaming, and hospital league tables, will not result in defensive medicine, a reluctance to take on difficult cases, and a stifling of innovation altogether?

Mr. Dobson: I shall ignore most of the right hon. Lady's preliminary remarks. On the sensible point that she made about trying to ensure that we do not stifle innovation, it is true that if someone tries a surgical procedure for the first time there will be no standard for it, and it will be a riskier form of treatment than procedures that have been frequently carried out.
I can safely say that at almost every meeting that I have had with doctors on that subject I have tried to emphasise that we do not want rules and standards to be laid down in such a way as to inhibit necessary developments. After all, not long ago the only place in Britain where one could have a hip joint replacement was where John Charnley worked, at the Wrightington hospital in Wigan—

Mr. Lindsay Hoyle: In Lancashire.

Mr. Dobson: Yes, in Lancashire; I apologise. 1 must admit that, as a Yorkshireman, I always did think that Wigan was in Lancashire; it always seemed to be there when it played against Yorkshire rugby league clubs.
Similarly, 20 years ago, Oldham—I know that technically, that is part of Greater Manchester, but at one time it, too, was in Lancashire—was the only place in the world where one could have a test tube baby. We must ensure that any new rules that we lay down do not inhibit wonderful developments such as those that took place at Wrightington and at Oldham general hospital.

Mr. Simon Hughes: At the end of last week there were reports that the use of human albumin for transfusions may not be safe, and today there has been another report that the cervical cancer screening carried out by a London hospital has not been entirely safe. Given that last October Ministers said that we must have a national system of quality assurance for cancer screening, and that in December the Secretary of State announced the need for a Commission for Health Improvement to ensure that the whole country has the highest quality standards, can the Secretary of State today assure women in particular, but also all general practitioners and patients, that we will not have to wait any longer for a national system to ensure that transfusions, screening and all other services are of the highest clinical standard everywhere?

Mr. Dobson: As the hon. Gentleman knows, we are trying—carefully, so as to carry the professions with us, because if we do not, no new system will work—to put in place measures to ensure that standards are maintained.


As for his reference to the use of albumin, I can only describe the article in The Observer as a grotesque travesty of the situation. The information was supplied to the Chief Medical Officer; the Chief Medical Officer asked the people who prepared it, after consultation within the Department, to send it to the Medicines Control Agency; the agency considered it; the Committee on Safety of Medicines was informed and also considered it. As long ago as 28 May, the committee concluded that it did not consider that withdrawal of human albumin products was warranted, and advised that an expert working group be set up. That group has met, and decided that withdrawal of human albumin products was not warranted. As Secretary of State for Health, I have to consider carefully the advice of those who have been put in a position to give me advice on such matters; I do not have to respond to hysterical articles by ill-informed journalists in badly edited Sunday newspapers.

Rev. Martin Smyth: The Secretary of State will be reassured by the fact that I support what he says at that level, not only about medical advice but about other advice. May I press him to tell us whether, when he deals with the procedures, information will be circulated to general practitioners about new procedures, so that they can guide their patients to places where those are being carried out? May I also express the hope that the statistics will major not on mortality figures, but on successful procedures—and not only clinical procedures, because many other procedures are vital for good health?

Mr. Dobson: I accept the hon. Gentleman's point. Mortality statistics are fairly straightforward, but statistics showing how well people do after an operation—if they have survived—are more difficult to calculate, evaluate and log in any system. We are going to enormous lengths to ensure that our proposals command the support of the profession; indeed, the first figures that we shall be publishing in the autumn command the support of those who are carrying out operations. If we could not carry them with us, the proposal would be absurd.

Waiting Lists

Mr. David Ruffley: What proportion of the increased funding provided to his Department in the most recent public spending allocations will be allocated to reducing waiting lists. [50979]

The Secretary of State for Health (Mr. Frank Dobson): We have already announced an extra £500 million to tackle waiting lists this year, which means that we have spent a total of £2 billion extra on the national health service since we came into office. Under the comprehensive spending review, the NHS will receive a further £18 billion for the next three years, including £5 billion or more for the NHS modernisation fund. We shall ensure that that money is linked to results so that, in the lifetime of this Parliament, we reduce waiting lists by 100,000 from the level that we inherited.

Mr. Ruffley: Will the Secretary of State explain why he and his colleagues conned the British public before the general election by saying that it would cost only £100 million to reduce waiting lists by 100,000?

Mr. Dobson: We did not actually say that. At the most recent Health questions, I said, in response to an excellent

question from my hon. Friend the Member for Bolsover (Mr. Skinner), that I was fairly confident that waiting lists had stopped rising in June. I can now say that the preliminary figures show that they fell by about 21,000 in June—what is more, they will continue to fall.

Ms Margaret Moran: I thank my right hon. Friend for the additional £630,000 that Bedfordshire health authority is receiving to cut waiting lists, which is in addition to the £2.8 million that it has already received. The money will help local hospitals to perform another 4,000 operations and will be of enormous benefit to patient care generally as well as to reducing waiting lists.
Is my right hon. Friend aware that part of that money will be spent on a new initiative to reduce the waste of theatre operating time owing to patient non-attendance? What other measures does he intend to take to ensure that valuable health resources are not wasted in that way?

Mr. Dobson: My hon. Friend is right. A substantial amount of time is wasted in hospitals when patients do not show up. We intend, through the new national health service charter—which will refer not only to patients' rights, but to their responsibilities—to draw attention to the fact that if someone does not turn up for an appointment, that harms not only them, but other people; moreover, it makes life difficult for hospital staff. We hope that, by publicising the damage that not showing up does to others, we can change the behaviour of those who have made hospital appointments or have had them made for them.

Miss Ann Widdecombe: May I use my first question to ask the Secretary of State whether he will take this opportunity to join me in placing on record a tribute to the Kent air ambulance, which crashed a few days ago with the loss of three lives? Will he pay tribute to the work of Graham Budden, the pilot, and Tony Richardson and Mark Darby, the paramedics? Will he also pay tribute, not only to all those who manned the air ambulance and did such sterling work, but to the entire community in Kent, which raised the money for the ambulance and supported it faithfully throughout?

Mr. Dobson: I certainly join the right hon. Lady in paying tribute to all concerned. I express my horror at what happened and my sympathy for the relatives and friends of those who died while trying to help others.

Miss Widdecombe: I am grateful to the Secretary of State.
I turn now to my main question. In order to get waiting lists down, it will, as the Secretary of State has said, be necessary to increase the number of doctors at general practitioner referral level and at work in hospitals. Does the right hon. Gentleman agree with the BMA that the 7,000 extra doctors that he has announced will be no more than the normal increase?

Mr. Dobson: The 7,000 extra doctors have to be paid for. But for the comprehensive spending review settlement, there would be no money to pay for them. Every year, medical schools produce approximately 3,400 new doctors, and we hope that the schools will continue to do so and that the doctors will find employment in the national health service. If the right


hon. Lady wants to criticise us about the number of doctors available, let me remind her that it takes five, six or seven years to train a doctor. Any criticism of the numbers available today should be addressed to those who were in my office five, six, seven or eight years ago.

Mr. Vernon Coaker: Try again matron.

Miss Widdecombe: May I invite the Secretary of State to try again? Just answer the question. Yes or no will do. Will the 7,000 doctors that the right hon. Gentleman has announced be over and above the normal increase, or is that the number that would have come anyway from medical schools and other sources?

Mr. Dobson: The answer is no. Doctors coming from medical schools do not necessarily end up working in the national health service unless someone gives them a contract and pays them. Without the money, there would be no contracts, they would not be paid and they would not be working in the NHS.

Dr. Desmond Turner: Does my right hon. Friend agree that while it is important to put money into bringing waiting lists down—I congratulate him on doing so—organisation and sensible management are equally important? One of the most important factors in the driving up of waiting lists under the previous Government was the idiosyncrasies introduced by the internal market system. Does he agree that removing the internal market will go a long way towards smoothing the path of reducing waiting lists?

Mr. Dobson: I agree with my hon. Friend. One of our objectives in getting rid of the competitive internal market is to get rid of the expensive paperwork involved, which is using huge amounts of NHS money that we would deploy to treat patients rather than to buy paper to shuffle around the world.

NHS (Drugs and Treatments)

Dr. Evan Harris: How he intends to involve the public in discussions about limits on the provision of drugs and treatments in the NHS. [50980]

The Minister of State, Department of Health (Mr. Alan Milburn): The public will be involved in setting national standards for the NHS through the new National Institute of Clinical Excellence, and in developing national service frameworks. We have also made it clear that local commissioners of services should consult the public to ensure that services reflect local needs and wishes.

Dr. Harris: The Minister will recall that at his last Question Time we dragged from him the admission that postcode rationing exists, particularly for new drugs. It is also recognised that 3.7 per cent. growth across a Parliament will not provide for growth in drug expenditure. Does the Minister accept that the question is not whether rationing exists for treatment for multiple sclerosis, varicose veins, fertility and impotence, but when the Government will admit that that is happening and

either fund the health service to avoid it, or engage the public and the taxpayer on how to meet demand for existing resources?

Mr. Milburn: As usual, I am not sure what is the policy of Liberal Democrat Members. There is no question of information being dragged out of this Government. We have acknowledged that treatments and the drugs available vary unacceptably throughout the country. Equally, we have made it clear that we are determined to bear down on those unacceptable variations. We want greater national consistency, based on more informed clinical judgments. The hon. Gentleman argued a few days ago from the Liberal Benches that the NHS needed 3 per cent. real-terms growth in expenditure. We have gone above 3 per cent. and 4 per cent. and for the next three years it will be 4.7 per cent. What does the hon. Gentleman want? Is 4.7 per cent. good enough or not?

Mr. Neil Gerrard: Will my hon. Friend ensure that debates about the availability of drug treatments focus not merely on the cost of the drugs but on the benefits? I am thinking, for example, of the new drugs for HIV, where there has been much focus on the cost but not as much on the long-term benefits, including the economic benefits of people being able to get back to work. In the argument about whether drugs should be available for a particular treatment, we want to avoid setting one group of patients against another, as has happened in the past.

Mr. Milburn: My hon. Friend makes two good points. On the first point, like previous Health Ministers, we get lots of advice from economists and others who say that we need to bear down on the NHS drugs bill, as though drugs were a bad thing, which is a naive assumption. If drugs mean easier, better and quicker treatment for the patient instead of going to hospital, that is a good thing and if it means growth in the NHS drugs bill, we should welcome it. On the second point, we want a more rigorous assessment of what is cost effective and clinically effective, particularly when drugs come on to the market.
To return to the question by the hon. Member for Oxford, West and Abingdon (Dr. Harris), at the moment assessment of drugs when they are first introduced into the NHS is inconsistent. That is why we are introducing the National Institute for Clinical Excellence to ensure greater consistency throughout the health service. After all, it is supposed to be a national health service, not a series of competing local health services.

Mr. Peter Bottomley: Hon. Members will agree with what the Minister has said, together with what the Secretary of State said about innovation and making general what has been shown to work. On the limiting of treatments, may I ask the hon. Gentleman, in a non-partisan way, whether he recognises that delays in non-emergency treatment for cataracts and hip operations, for example, affect the elderly in particular? Will he consider publishing for each health authority the instructions to hospitals in their areas on necessary delays for waiting lists? West Sussex has the highest proportion of elderly people and the waiting time is 17 months.

Mr. Milburn: First, on the general point, the hon. Gentleman will be aware—I hope that he and his party


now accept this—that as we bring down waiting lists, which we are doing, waiting times for individual patients will also come down and I hope that he welcomes that. I will look into the situation in his area. I am aware of the problems there because he has seen me about them, in particular the increased demand that can arise from a higher than average elderly population. I will be pleased to look into the specific concerns that he expresses.

Dental Services

Mr. Peter Viggers: If he will make a statement on how national health service dentists are paid for root canal work. [50981]

The Minister of State, Department of Health (Mr. Alan Milburn): Root canal treatments are included as items of treatment in the statement of dental remuneration for which dentists can claim an NHS fee.

Mr. Viggers: Well, I am grateful for that reply, as far as it went. Does the Minister agree that the fees payable to dentists for root canal work, at £24 for an incisor operation and £58 for a molar operation, which takes about two hours, are completely inadequate? Does he agree that dentists can undertake those operations only at a loss to themselves, if they are reputable and competent, and that recent studies show that in many cases dentists are undertaking such operations speedily and unprofessionally, which is resulting in low standards with further operations sometimes being necessary thereafter? What is he going to do about it? Before he replies, may I point out that dentists and patients in my constituency do not want to know what happened last year and the year before, but what will happen next year and the year after?

Mr. Milburn: I am sure that they do not want to know what happened last year and the year before. The hon. Gentleman will be aware that an independent review body deals with fees for procedures performed by dentists. We submit evidence to that body, as other Governments have; dentists submit evidence too, and the body recommends the fees that it considers appropriate. Over the past few years, the doctors and dentists remuneration review body has made recommendations for increases in fees well above the rate of inflation.

Mr. Eddie O'Hara: It may come as a surprise—although it should not—to some Opposition Members to learn that the more important question in some parts of the country is whether one can receive root canal treatment on the NHS. What steps is my hon. Friend taking to ensure better availability of NHS dental treatment in the poorest areas to provide such important procedures as root canal work?

Mr. Milburn: The Government have taken a significant step forward on that. My hon. Friend will be aware that we inherited great difficulties with access to NHS dental services in some parts of the country. We have introduced a new investing in dentistry scheme, which is already bringing home the bacon because it is recruiting dentists back to the national health service. As a consequence, 250,000 extra patients now have access to NHS dental services which they would not have had under the previous Government.

Out-patient Consultations

Mr. John Bercow: What estimate he has made of the number of people awaiting out-patient consultations on (a) 1 May 1997 and (b) 1 May 1998. [50982]

The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): Information on the number of people nationally awaiting out-patient consultations is not available centrally. However, information on first out-patient appointments shows that at March 1998, 81 per cent. of patients were seen within 13 weeks of general practitioner written referral and 96 per cent. were seen within 26 weeks. That compares with figures for March 1997 of 83 per cent. and 97 per cent. respectively.

Mr. Bercow: At Stoke Mandeville hospital, which serves thousands of my constituents, there has been an 88 per cent. increase in the number of people waiting for out-patient appointments for between 13 and 26 weeks since the Government came to office. What proportion of the alleged fall in waiting lists—which is, as yet, unpublished—is due to an increase in the waiting list to get on the waiting list?

Mr. Boateng: We have made it crystal clear that our targets on waiting lists should not be achieved at the expense of out-patient appointments, and we shall implement that policy. I hope that the hon. Gentleman will give credit to, indeed thanks for, the additional resources that have been made available in his constituency which have provided 51 extra beds, which would not have been available if the hon. Gentleman's party were in government, and 4,280 extra treatments. It is time we received some gratitude from Opposition Members for those resources.

Mr. Andrew Dismore: Is my hon. Friend aware that part of the £2 million awarded to Barnet health authority to tackle waiting lists will be used to increase out-patient sessions at Edgware hospital, which the previous Government closed? Does not that show that this Government are trying to restore health services to the area, unlike the Conservatives when they were in government?

Mr. Boateng: My hon. Friend has performed a sterling service for Edgware hospital in his constituency and in north-west London generally. It is good news that the hospital is now delivering the new, modernised health service for which the people of his constituency and many others voted.

Mr. Philip Hammond: Will the Minister acknowledge that what matters to patients is the total waiting time from GP referral to treatment? Will he further acknowledge that reduced numbers on the waiting list for surgery will be a pyrrhic victory if the waiting list to get on the waiting list is getting longer? Will he therefore arrange for data on the total out-patient waiting lists in the UK to be collected and published with in-patient waiting lists in future?

Mr. Boateng: Those data were never available under the previous Government, and they will not be available under


the present one. What counts is that we should shorten waiting lists across all fronts. Out-patients and in-patients alike will benefit from that. They did not benefit in that way under the previous, Conservative-led Government.

Dr. Brian Iddon: According to figures that I have received from the Library, at the end of the financial year 1995–96, the debt owed to the national health service by non-NHS debtors was a staggering £543 million. Does my hon. Friend agree that many of the difficulties that the previous Administration bequeathed to the national health service could be dealt with if some of the debt that they left us were collected?

Mr. Boateng: The previous Administration have a great deal to answer for, and that is a small part of it.

Premature Deaths

Mr. Norman Baker: What research he has (a) commissioned and (b) evaluated into the causes of premature deaths each year which can be ascribed to (i) tobacco, (ii) alcohol and (iii) cannabis. [50983]

The Minister for Public Health (Ms Tessa Jowell): The harmful effects of tobacco are well researched and documented—most recently, by the Scientific Committee on Tobacco and Health. An estimated 120,000 people die every year from smoking or smoking-related causes.
The latest evidence on the harmful effects of alcohol on health was analysed thoroughly in the preparation for the 1995 sensible drinking reports, the recommendations of which we have adopted as continuing policy. It is estimated that between 4,000 and 40,000 people die each year from alcohol misuse.
The harmful effects of smoking cannabis—for example, bronchitis, cancers, short-term memory loss and aggravation of existing mental disorders—are well documented. It is estimated that five people have died in the past four years from cannabis abuse.

Mr. Baker: It is interesting that the one illegal recreational drug of the three is the one that, apparently, caused the fewest deaths. However, will the Minister address a problem that many health professionals have identified? There appears to be a beneficial medicinal use for cannabis, yet at the moment it is improper—indeed, illegal—for health professionals to prescribe cannabis for any purpose. Will the Minister reconsider the matter, to discover whether those who would benefit from the medicinal use of cannabis might be enabled to do so without being criminalised?

Ms Jowell: There are perfectly clear procedures for applying to conduct research to establish the medicinal benefits of cannabis. The Government have absolutely no intention of making the use of cannabis legal, but this is an opportunity for Opposition Front Benchers to clarify their position on the issue, and perhaps for the hon. Member for Rutland and Melton (Mr. Duncan) to make clear his position in relation to his recent book, "Saturn's Children", in which he said:
Nor are drugs a particularly threatening health problem.
The Government disagree.

Mr. Desmond Swayne: Of the 120,000 people who die prematurely from smoking-related diseases each year, 53,000 are over the age of 75. Given that the Minister's Department has stated that life expectancy for men is 75 years, how can those people possibly be described as having died prematurely?

Ms Jowell: I made it clear that, every year, more than 120,000 people die from smoking or smoking-related causes. I did not identify those who died under the age of 75, but, with life expectancy increasing, it is absolutely clear that, for people who smoke, the chances of dying from tobacco or tobacco-related causes are increased by something like 100 per cent. Half of smokers die from causes related directly to smoking.

Mr. Paul Flynn: Does not my hon. Friend recall that tens of thousands of people in this country who suffer from multiple sclerosis, the effects of chemotherapy and glaucoma take cannabis illegally as it provides the best relief from the serious pain that they endure? Why does she continue to condemn those people to dealing in an illegal market where they cannot guarantee the quality or strength of the product—and can only smoke it, which is the most dangerous method of using cannabis?
Did my hon. Friend see the "Watchdog" programme last night, which presented both sides of the argument? It received a massive public reaction, with some 96 per cent. of people voting in favour of the medicinal use of cannabis. When will the Government get in touch with public opinion and stop maligning the hon. Member for Rutland and Melton (Mr. Duncan) for the four most intelligent pages in his book, which he has withdrawn—although, quite rightly, he has not changed his mind about them? It is about time the House allowed intelligent thought among Front Benchers.

Ms Jowell: I join my hon. Friend in assuming that the failure of the hon. Member for Rutland and Melton to respond to that point means that he has not changed his mind about the legalisation of hard drugs.

Madam Speaker: Order. The hon. Member for Rutland and Melton (Mr. Duncan) is not allowed to respond. He does not have an opportunity to do so; he has had his question. Let us have a little justice.

Ms Jowell: To my hon. Friend the Member for Newport, West (Mr. Flynn), who has long argued the case in relation to people who suffer from multiple sclerosis, I reiterate that those who wish to undertake research into the beneficial medicinal effects of cannabis use may apply to the Home Office for permission to conduct that work.

Mr. Nigel Waterson: Does the Minister agree that, when examining the use of drugs—recreational or otherwise—we should consider not only premature deaths but ruined lives? Does the Minister agree that the Liberal Democrats' policy of legalising cannabis is both dangerous and irresponsible?

Ms Jowell: I agree.

Ambulance Service (Staffordshire)

Charlotte Atkins: What factors underlay the response rate times achieved by Staffordshire ambulance service in the last three years. [50984]

The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): My hon. Friend will be aware that Staffordshire ambulance service has achieved the best response times in England for the third year running. I commend this achievement, which is attributable in part to an innovative system of positioning ambulances on standby close to areas where emergencies are most likely to occur. We need to spread that good practice, which I know other ambulance services are looking at. I congratulate both staff and management of Staffordshire ambulance service on their enterprise.

Charlotte Atkins: What plans does my hon. Friend have to ensure that all ambulance services take advantage of Staffordshire's valuable experience? It appears that nothing has been done in the past three years to ensure that other ambulance services—such as Cornwall, which is at the bottom of the league table—benefit from the Staffordshire experience. The results have been startling and have produced huge dividends for patients, particularly those suffering cardiac arrest.

Mr. Boateng: The Staffordshire ambulance service has already led several seminars that we have organised in order to encourage the spread of good practice. We must make it absolutely clear that we expect all ambulance services to respond to 75 per cent. of life-threatening calls within eight minutes by 2000–01. Staffordshire is so far the only ambulance service to have met that target already, and it is showing the way for others. Clear, strategic business planning has managed to achieve improvements without additional costs. Ambulance services nationwide must learn that lesson, and we intend to ensure that they do.

NHS Trusts

Mr. Tim Loughton: What meetings his Department held with members or representatives of local authorities prior to the June 1997 trawl for nominations to NHS trust boards; and if he will make a statement. [50985]

The Secretary of State for Health (Mr. Frank Dobson): So far as I know, the only meeting with local authority representatives at which nominations to NHS boards was discussed was an official meeting on 12 May involving myself and other Ministers and official representatives of the Local Government Association.

Mr. Loughton: Will the Secretary of State take this opportunity to confirm that last year's scandal of Labour activists constituting 80 per cent. of board appointments to trusts—as confirmed by the Commissioner for Public Appointments—is a thing of the past? If political correctness is no longer an overriding concern when it comes to appointments in the national health service, can the Secretary of State explain how, although the chairman of the West Sussex health authority recently approved and

offered 14 names to fill a vacant board appointment on the West Sussex health authority—all of them male—the Secretary of State managed to appoint a woman?

Mr. Dobson: I will make a start. Following the precedent set by the House of Commons some five or six years ago when we appointed 100 per cent. of the Speaker as a woman, I tried my best to ensure that at least half the appointments to NHS trust boards and health authority boards were women. We have achieved that target and I am proud to have done so. If the chair of the health authority—I forget which one—to which the hon. Gentleman referred could not come up with one woman out of 14 names, he should have his head seen to.

Dr. Phyllis Starkey: Does my right hon. Friend agree that it is extremely important that local authorities and health authorities work closely together if we are to achieve a seamless system of health and community care? I particularly commend to him the experience in my constituency, where the unitary council worked closely with the health authority with regard to the winter crisis money and, between them, effectively reduced the problems in the area and helped a number of elderly people to obtain more appropriate treatment with support in the community. Is it not reasonable that such co-operation between local authorities and health authorities should be reflected in appointments to health authority boards?

Mr. Dobson: It is true that one reason for appointing at least a number of members of local authorities to health boards is to improve the liaison between the two, but elected members and appointed non-executives should not be the main channel for such liaison. Liaison at an official level must be improved, and that is one reason why we propose that, in future, the chief executive of a local authority should be expected to attend and participate in, but not vote at, the board meetings of the health authority. Such co-operation is necessary.

Mr. Christopher Gill: When the right hon. Gentleman addressed the annual meeting of the Association of Community Health Councils for England and Wales on 9 July last year he said:
At the General Election we promised that we would make sure that the boards of health authorities and trusts would be more representative of the local communities they serve.
Why then is there no longer a representative of general practitioners on the Shropshire health authority? Why then is there no longer a representative from the Ludlow constituency on the Shropshire health authority? Why is it that 50 per cent. of representatives on the Shropshire health authority are from the socialist stronghold of Telford? [HON. MEMBERS: "Oh!"] There is more to come, Madam Speaker. Why is it that the last two appointments to the Shropshire health authority were Labour councillors? When does the Secretary of State intend to address those problems and reply to my letter of 13 July?

Mr. Dobson: When I set about making the appointments about which the hon. Gentleman complains, I was addressing the problem of significantly unrepresentative boards appointed by our predecessors. In case anyone says that I am justifying myself, the Commissioner for Public Appointments, who was


appointed by the previous Government and served in a senior position in the NHS as an appointee of the previous Government, has endorsed, in his Official Report, all that we have been doing, and has recognised that we have carried out the obligation that we entered into at the general election to make the boards more representative of local people. That is what we said we would do and that is what we are doing.
The hon. Gentleman raises one relevant point, which is that where health authorities cover a substantial area it is sometimes difficult to obtain representation which covers each part of the area, a matter which I am trying to deal with. It is interesting to note that I am the first Secretary of State to ask for a map of each area showing whence each representative comes. None of my predecessors bothered to look.

Over-medication

Mr. Paul Flynn: What proposals he has to reduce the incidence of over-medication of the elderly. [50986]

The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): The Department and the national prescribing centre will publish a report on GP prescribing support in September. The document will give many examples of good practice where pharmacists have assessed prescribing for patients in a number of areas, including nursing home settings.

Mr. Flynn: Is the Minister in a position to respond to my letters and the reports that I have sent him from Gloucester, Glasgow and Manchester, which reveal that up to one in five hospital admissions for elderly people is the result of the misuse and overuse of medicinal drugs; and that, of those patients in care homes who show symptoms of dementia, more than half have drug-induced dementia? Will he replicate the splendid review carried out by the department of psychiatry at the university of Manchester, which shows that reducing drug intakes for elderly people makes them more alive, relieves them from the confusion and misery in which they live, saves the health service a small fortune and makes available extra money to spend on care?

Mr. Boateng: I will reply in detail shortly to the points that my hon. Friend raised in correspondence, but I was glad to have the opportunity, on 26 June this year, to give a prize to that self-same department—the department of old-age psychiatry at the university of Manchester—as part of the pharmaceutical care awards. We have learnt from the experience of that Manchester project that where pharmacists go out and about in the community, particularly where they are concentrated around nursing homes, the number of drugs prescribed per resident can be significantly reduced, stays in hospital can be reduced, and, significantly, the number of deaths is reduced. We want that good news and good practice replicated throughout the national health service.

Dr. Peter Brand: Does the Minister agree that one reason for over-medication, especially of mentally ill and frail elderly people, is the NHS's withdrawal from respite care, day care and long-term care for elderly people? Does he recognise that the only way

in which those people are being contained in the community is by doping them up? Does he agree that, to avoid that problem, we need more resources to support people in the community?

Mr. Boateng: We certainly need to ensure that resources, including any new resources, are applied in ways that complement health and social care being delivered together. By making a wider range of therapies and assistance available to old people we can reduce their dependence on drugs, particularly where we work in contact with the voluntary sector, which has introduced some important and innovative ways of proceeding. We are working on that now.
Announcements on mental health will be made in due course, and the elderly will benefit alongside the young from our new policies in that area.

NHS Direct

Ms Gisela Stuart: What plans he has for extending NHS Direct. [50987]

The Secretary of State for Health (Mr. Frank Dobson): The new -hour, nurse-led telephone helpline, NHS Direct, will be nationwide in 2000. It is currently being piloted in three areas, and, by the end of this financial year, it will be extended to cover at least 20 per cent. of the population. Three of the new areas to be covered will be Manchester, Birmingham and Cornwall, and the others will be announced in early August.

Ms Stuart: I welcome my right hon. Friend's announcement that NHS Direct will be extended to the country's second city, Birmingham. That is very much welcomed by all my constituents. Has my right hon. Friend analysed the success of the first wave of areas in which NHS Direct was used so that I may give my constituents a clear idea of what benefits they may receive from it?

Mr. Dobson: I am glad that my hon. Friend welcomes the proposed extension of the scheme to cover the great city of Birmingham. It may interest her constituents to know that some 80 per cent. of those who called said that they were following a course of action different from the one that they had intended to follow before making their call. Thus 80 per cent. of people were influenced by the nurse on the end of the helpline. Some 30 per cent. of callers were directed by the nurse to less resource-intensive care and some 25 per cent. were guided towards more resource-intensive care. In other words, when people were told, "Little Johnny has a bit of a fever, but will probably be all right in the morning," no care was provided, whereas arrangements were immediately made for an ambulance to be sent to take people in desperate need of care off to hospital.
The object of the scheme is to provide an additional service which is not available at present. The three pilot schemes clearly showed that lots of people all over the country would not go to accident and emergency, get their


doctor out in the middle of the night or ring for an ambulance, but would ring up for advice, reassurance or, in some cases, urgent treatment.

Mrs. Marion Roe: Will the Secretary of State confirm that NHS Direct will not be funded at the expense of other nursing-led activities?

Mr. Dobson: Special funding has been made available this year for the pilot schemes, and will also be made

available for the additional schemes that are coming on stream. The scheme has an advantage, which we hope will be put to good use. A substantial number of nurses give up nursing because they have suffered back or other injuries which make it impossible to continue normal nursing. We hope that the idea of using their nursing skills on the end of a telephone will appeal to some of them, and that we will be able to bring their expertise and experience back into the national health service—to their benefit, and the benefit of patients.

Points of Order

Mr. Julian Brazier: On a point of order, Madam Speaker. Would you rule on a point affecting the Parliament Acts 1911 and 1949, which may help hon. Members later this evening? It has been widely canvassed that, if the House decides to drop the amendment relating to the gay age of consent, it may come back in a new measure in the new Session. Would you rule on whether the 12-month delaying power of the other place would be triggered tonight or on Second Reading of any new measure?

Madam Speaker: I am grateful to the hon. Gentleman for giving me notice of his point of order.
I read the Parliament Acts as applying to Bills originating in this House, but not to Bills that began in the House of Lords. That is also the view that happens to be taken by "Erskine May" at page 569. Thus, the Parliament Acts do not apply to the Crime and Disorder Bill, but they would apply to a Bill introduced in this House, if that were to follow today's proceedings.

Mr. Owen Paterson: On a point of order, Madam Speaker. Today, a White Paper on Welsh trunk roads has been published. One copy is available in the Library and 40 copies have been sent to Welsh Members, but no copies are available in the Vote Office. I am a member of the Welsh Affairs Committee and the Welsh Grand Committee. The A483, which is nominated as a priority road, runs straight through my constituency. Would you please clarify what the rules are concerning the availability of that document?

Madam Speaker: If a White Paper has been laid before the House, it certainly should be available to hon. Members in the Vote Office. I hope that those on the Treasury Bench will take heed of what I say.

Mr. Robert Syms: Further to that point of order, Madam Speaker. I also requested that document, which is a review of the trunk roads of Wales, from the Vote Office, as a Member of the United Kingdom Parliament. I was told that it was unavailable. There is to be a decision later this week on English trunk roads. Would it be appropriate for that document to be available from the Vote Office, for all Members of Parliament?

Madam Speaker: It very much depends on the time and date when documents are laid before this House. These are the procedures that we have always followed: when documents are laid before the House, they should be available for Members. I see that those on the Front Bench have heeded what I have said about this matter.

Organ Donation

Dr. Evan Harris: I beg to move,
That leave be given to bring in a Bill to provide that the organs of potential donors are available for transplant on death unless the potential donor has previously indicated a wish to the contrary.
There is a crisis in the country. It is a quiet crisis, but nevertheless a tragic one. It results from the mismatch between people whose lives could be saved, or indeed transformed, by the donation of organs—kidneys, for example—and the availability of organs to fulfil the demand.
The latest available Government figures show that more than 200 patients die each year on the waiting lists for liver, heart, lung or heart-lung transplants alone. That figure does not include those waiting for kidney transplants. The number has been increasing in recent years, and is almost certainly an underestimate, as many patients do not even reach the waiting lists when the supply of organs is short.
The figures for kidney donations show that, in 1997, there were 1,635 kidney transplants, but the waiting list stands at 5,732. The number of kidney transplants has fallen for three successive years. The liver transplant waiting list has risen over the past three years, and the number of cadaveric solid organ donations and donors is diminishing—that is, the number of donations of hearts, hearts and lungs, livers and kidneys. It is not clear why the number of donations is falling, but part of the reason may be improved road safety. Nevertheless, there is a problem, and I think that the House should address itself to how that problem can be solved.
It may be useful to look at the current law, which, in the case of cadaveric organ donations, is governed by the Human Tissue Act 1961. The Act allows the person defined as lawfully in possession of the patient's body after death to authorise removal of parts of the body if either the patient has formally expressed the wish for his or her body to be used in that way or, after such inquiries as may be practicable, the person in possession of the body has no reason to believe either that the deceased expressed an objection to removal or that the surviving spouse or any surviving relatives object.
There are already problems with that law, because it does not clearly define who is in lawful possession of the body. It does not state whether it is the hospital authorities, as is currently believed, or whether relatives have a greater claim. It also does not state whether, if relatives establish a greater claim, there is a pecking order in the event of disagreement about authorisation.
If relatives are lawfully in possession, they are not required to allow the organs to be used to save other people's lives; they are merely authorised to do so. If, before death, the patient expressed the wish that his or her organs should be used to save others' lives, it does not automatically follow that they will be. Similarly, if the patient did not clearly express an opinion, the relatives are asked for their opinion. Therefore, relatives have an effective veto in both circumstances.
That is the contracting-in system, which we use in this country. Other European countries use a contracting-out system. France introduced such a system in 1977, under which people can register as being unwilling to let their organs be used in such a way. Since 1988, when the regulations were changed, they have been able to do that by means of a computerised national register.
I think that this country should seriously consider introducing a contracting-out scheme, which could better be described as "presumed consent". There is a moral argument in favour of that. On 30 May, Professor Ian Kennedy—who, as hon. Members will know, was appointed to run the inquiry into the Bristol hospital scandal—published a paper in The Lancet on behalf of the International Forum for Transplant Ethics. That paper—of which I was unaware when I chose the long title of the Bill—clearly sets out the philosophical arguments and premises. It states that there is a moral case for changing the law regulating organ donation from a system of contracting in to presumed consent in countries that have not yet done so. That is because it is accepted that, generally speaking, such a system would increase the supply of organs for transplantation. That would improve and save lives, and would be a good measure.
In countries such as the United Kingdom that, since 1990, do not operate a system of presumed consent, the supply of organs and the gap between demand and supply has widened. Some people, such as professionals who, in this country, are split on the matter, argue that public education and measures to simplify the process of donation and retrieval could improve the supply of organs. However, the evidence suggests that that is not entirely clear and that countries that have switched to presumed consent have a better supply.
The methods in various countries are analysed in the Kennedy paper. Of the countries that are considered in that document, only the UK takes organs following the consent of the person who is lawfully in possession of the body, and that is subject to the express objection of the deceased or of the relatives if they are available. An alternative, which operates in Norway and elsewhere, is that after relatives have been informed of the intention to remove organs, irrespective of their consent, donation and retrieval take place. In Italy, that is done when it has been ascertained that the relatives do not object and in Belgium, which I shall shortly deal with in more detail, the process is carried out when the dead person has not expressed a prior objection. When that is confirmed by the relatives, consent is presumed.
People in Britain have said that the differences in the rates of organ donation between countries can be explained by religious or cultural factors, by the rate of road traffic accidents, by gun laws or by the ability of specialist teams in intensive care units better to retrieve organs for donation. According to the Kennedy paper, in Belgium, there is well-documented and convincing evidence that, in 1986, a change in law from contracting in to presumed consent—that is, contracting out—led to an increase in organ supply.
In an inter-country study, the staff of the transplantation centre in Antwerp strongly opposed the new law and retained a contracting-in policy which was accompanied by enhanced public and professional

education. They felt that the new scheme would damage people's willingness to donate. By contrast, in Leuven, the new law was adopted. Antwerp's organ donation rates remain unchanged despite the extra education, but in Leuven, they rose from 15 to 40 donors a year over three years. In the country as a whole, organ donation rose by 55 per cent.
There is clear evidence that moving to a presumed consent system would increase the availability of donations and would save lives. However, we must recognise that people have strong ethical and moral concerns about whether that is the appropriate way forward. Nevertheless, the case must be made for moving to a system such as presumed consent under which people have to opt out. It is not clear that relatives are any more disturbed by organs being taken by presumed consent than they are by being forced at a difficult psychological time to make that decision. The Belgian system, under which confirmation is requested of the relatives rather than the relatives being trodden on willy-nilly, is plainly an appropriate system for the Government to consider.

Mr. Robert Maclennan: Will my hon. Friend give way?

Dr. Harris: Yes.

Madam Speaker: Order. I am sorry, but I cannot allow an intervention in such an application.

Dr. Harris: I understand that, Madam Speaker, and I apologise for giving way. I should be happy to enter into correspondence, or to converse with Opposition Members or the Government on this matter because it is important to many thousands of people who are on waiting lists and to their families.
I urge the Government to consider consultation and to create a public debate on the measure so that we can move it forward.

Question put and agreed to.

Bill ordered to be brought in by Dr. Evan Harris, Mr. Norman Baker, Mr. Gerald Bermingham, Mr. Bill Michie, Mr. Alan Simpson and Mr. Graham Stringer.

ORGAN DONATION

Dr. Evan Hams accordingly presented a Bill to provide that the organs of potential donors are available for transplant on death unless the potential donor has previously indicated a wish to the contrary: And the same was read the First time; and ordered to be read a Second time on Friday 23 October, and to be printed [Bill 242].

Mr. Tam Dalyell: On a point of order, Madam Speaker. Following the report on organ donation in the late 1960s, which was chaired by the father of the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan), I tried on eight occasions to bring in a similar Bill to that so eloquently introduced by the hon. Member for Oxford, West and Abingdon (Dr. Harris). On the first occasion that I did so, not only did Health Ministers remain in their places, but such was the importance placed on the subject that the then Prime Minister decided that he would wait and hear what was said.
In the corridor afterwards, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said to me rather laconically, "I was sympathetic to what you had to say, but I don't think you'll persuade Keith Joseph", and nor did I. Is it not a matter of etiquette on ten-minute Bills that representatives of the Department are present to hear what is said? This is a Parliament point rather than a party point. If the ten-minute Bill procedure—albeit kite-flying—is to be at all meaningful, Ministers should at least hear what is said.

Madam Speaker: I understand the hon. Gentleman's strong feelings on this matter. Ministers have busy schedules, and it is for them to decide whether to be present on the Front Bench on such an occasion. It is entirely a matter for Ministers.

Orders of the Day — Northern Ireland (Sentences) Bill

Lords amendments considered.

Clause 1

SENTENCE REVIEW COMMISSIONERS

Lords amendment: No. 1, in page 1, line 7, leave out
(", and one of them shall be appointed chairman")

The Minister of State, Northern Ireland Office (Mr. Adam Ingram): I beg to move, That this House does agree with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss Lords amendments Nos. 20, 21 and 23.

Mr. Ingram: These are all Government amendments concerned with the appointment of joint chairmen of the sentence review commissioners. The reason behind the amendments is to ensure that the Secretary of State will be able to satisfy clause 1(3), which states:
In making appointments the Secretary of State shall have regard to the desirability of the Commissioners, as a group, commanding widespread acceptance throughout the community in Northern Ireland.
The appointment of a chairman is of particular significance, and it is felt that there could be considerable merit in appointing joint chairmen, hence the amendments.

Mr. Andrew MacKay: I rise briefly to say that the Opposition fully support this group of amendments. To prevent us from wasting further time on the Bill, I can tell the House that we agree with all the other amendments. It has been extremely helpful for the Government to have improved and modified the Bill in the other place. We are grateful to them, and we appreciate the trouble that the Minister has taken.

Mr. Phil Willis: The Liberal Democrats support all the amendments, which are clearly improvements to the Bill. We support the Government on all the amendments tabled.

Madam Speaker: May I collect the voices on all the amendments?

Mr. Kevin McNamara: No, Madam Speaker.

Madam Speaker: Sorry, on amendment No. 1. Do you wish to speak, Mr. McNamara?

Mr. McNamara: I thought, Madam Speaker, that you were suggesting that our voices should be collected on all the amendments. I want to get advice from the Minister about the content and meaning of the new clause. I would be delighted if you wanted to take amendments Nos. 1 to 15.

Madam Speaker: I cannot. I must take them individually. I shall first collect the voices on amendment No. 1.

Lords amendment agreed to.

Lords amendments Nos. 2 to 15 agreed to.

New clause

Lords amendment: No. 16, after clause 12, to insert the following new clause—Interpretation: terrorism—
. In this Act "terrorism" means the use of violence for political ends, and includes any use of violence for the purpose of putting the public or any section of the public in fear.

Mr. Ingram: I beg to move, That this House doth agree with the Lords in the said amendment.
This amendment would add a new clause giving a definition of "terrorism" that is the same as the definition contained in the Prevention of Terrorism (Temporary Provisions) Act 1989. The Government consider that it would be of value to have such a definition to avoid any possibility of ambiguity or a suggestion that the term might be used in a different sense in this Bill than in other legislation.

Mr. McNamara: I was interested to know why the new clause was necessary when there was a definition of "terrorism" in the Prevention of Terrorism (Temporary Provisions) Act 1989 and the Northern Ireland (Emergency Provisions) Act 1991, under which people covered by this Bill had already been sentenced. I could see no reason why that definition was not being used when it was the definition under which they were sentenced.
We now have an explanation from my hon. Friend the Minister, for which we are grateful. I thank him for it.

Lords amendment agreed to.

Lords amendments Nos. 17 to 24 agreed to.

Orders of the Day — Crime and Disorder Bill [Lords]

Lords Reasons for disagreeing to certain Commons amendments considered.

New clause

REDUCTION IN AGE AT WHICH CERTAIN SEXUAL ACTS ARE LAWFUL

Lords Reason:

The Lords disagree to amendment No. 14 made by the Commons for the following Reason:
Because it fails adequately to protect vulnerable young people.

The Secretary of State for the Home Department (Mr. Jack Straw): I beg to move, That this House does not insist on its amendment to which the Lords have disagreed.

Madam Speaker: With this, it will be convenient to consider the Lords reasons for disagreeing to amendments Nos. 98, 107, 108, 140 and 237.

Mr. Straw: These amendments relate to amendments tabled at the House of Commons Report stage in the name of my hon. Friend the Member for Brentford and Isleworth (Ann Keen), to equalise the age of consent for homosexual and heterosexual activity at the age of 16. [Interruption.] Madam Speaker, shall I continue?

Madam Speaker: Yes; I am listening intently. There is a lot of difficult procedure for us to follow, and I am listening very carefully.

Mr. Straw: If it is acceptable, Madam Speaker: it will take me about 10 minutes to explain my position. I was anxious that you should not spend the whole of that time sitting on the end of the Chair.

Madam Speaker: I was not specifically waiting for something—although I am always prepared.

Mr. Straw: I know that you are always prepared, Madam Speaker—like a good girl guide.

Madam Speaker: Brownie.

Mr. Straw: Or a brownie. We had better not go down that path just now.
On 22 June, on a free vote, the House backed the amendments by 336 votes to 129. My hon. Friend the Member for Brentford and Isleworth was supported in her amendment by my hon. Friends the Members for Exeter (Mr. Bradshaw), for Enfield, Southgate (Mr. Twigg) and for Blackpool, South (Mr. Marsden) and by the hon. Members for Oxford, West and Abingdon (Dr. Harris), for Epping Forest (Mrs. Laing) and for Witney (Mr. Woodward)—all of whom have shown great moral conviction on a very difficult issue for all concerned.
The amendments were to the Crime and Disorder Bill, which is one of this Parliament's major measures on law and order, giving effect to 12 manifesto commitments that


will have a significant impact on the safety and well-being of our constituents. Overall, the Bill has been widely and enthusiastically welcomed by the public and police. It received substantial support on both sides of the House on Second Reading and on Third Reading, both of which were unopposed.
The Bill completed its Committee stage in June. Almost five weeks ago—on 24 June, after its Report and Third Reading—it was sent from the House to another place.
Business managers and I had originally planned that the Commons amendments to the Bill—which began in the Lords—should have been debated at the beginning of July, so that there was adequate time to resolve any disagreements between the two Houses, should any arise, before the end of this month. However, that more relaxed timetable did not prove possible, not least because of the intervention of two sets of Northern Ireland legislation.
For very good reasons—I can go into the matter in more detail if hon. Members so wish—we have always aimed to achieve Royal Assent to the Bill by the end of this week. Apart from those clauses that are due to come into force on Royal Assent itself, a full implementation timetable was due to start on 30 September. The overall timetable contains about 25 separate items in the Bill, including pilots on the Bill's major youth justice reforms, and starting three other linked pilots, all of which have already been chosen, announced and published; crime and disorder partnerships, which will work locally to reduce crime and disorder; and measures to implement the provisions on football hooliganism, which were rightly pressed by the shadow Home Secretary when the matter was dealt with on Report. Unless we have Royal Assent by the end of this week, those provisions cannot come into force before the beginning of the soccer season.
The Bill also contains provisions on sex offenders. As the House knows, there is currently a gap in the law on sex offenders who were sentenced before the Criminal Justice Act 1991 came into force. Under current law, it is not possible for any licence to attach to those offenders once they are released from prison—something which has caused major constituency difficulties for many hon. Members on both sides of the House.
The sex offender order is designed to fill that gap. The police will be able to apply for such an order in respect of a registered sex offender who has previously served a sentence and who is anticipated to represent a threat to public order. If we do not get Royal Assent, we cannot put the sex offenders order into action as quickly as possible. Many other measures will also be deferred if we cannot get Royal Assent by the end of this week.
4 pm
My hon. Friend the Member for Brentford and Isleworth and colleagues who supported the amendment have generously and readily accepted the imperative of achieving Royal Assent for the Bill by the end of this week. I should not have asked them to support our move or asked the House not to insist on the amendment had I not first attempted to develop an alternative approach that could have met the will of this House immediately to equalise the age of consent while also meeting the concerns of the other place to protect vulnerable young people. However, I am satisfied that there is no

compromise solution that could be debated and resolved during the rest of this week that would be acceptable to another place and to this House.
Before I come to my proposals for dealing with the will of the House on the issue as expressed on 22 June, it may be helpful if I set out the background to the issue and explain why the Government accommodated an amendment on the age of consent in the Bill.

Mr. Tony Benn: My right hon. Friend is assuming that the Lords would allow the Bill to go down rather than concede to the overwhelming will of the House of Commons. That is a fundamental issue. Why does he assume that the Lords would succeed, particularly as I understand that the proposal will be reintroduced in the next Session, although the Lords could delay that as well? We cannot assume that the problem will be solved if the hereditary peers go, because the life peers also voted against the amendment.
Is this not another capitulation to an unelected Chamber, comparable to what has happened over fox hunting? Under previous Governments, the leaders of the House of Lords have told Cabinet Committees—including those of which I was a member—not to proceed with certain proposals because they would be obstructed. Is not that the real issue—not the Crime and Disorder Bill, which the Lords could hardly reject, or even gay rights, important though the issue is and one that I have always supported, but whether the House of Commons, particularly on a free vote, is to have its will over a House that, on this matter, is elected by nobody, accountable to nobody and representative of nobody?

Mr. Straw: I intend to set out arrangements by which this House will be able to achieve its will over the other place—by invoking the Parliament Acts 1911 and 1949 if necessary. However, the provisions of the Parliament Act are not available on Bills that begin their journey through Parliament in the other place. Although I fully subscribe to the Labour manifesto pledge to remove the right of hereditary peers to sit and vote in the House of Lords—we shall bring forward proposals in due course to give full effect to that commitment—whether we like the fact or not, even if the hereditary peers had not been allowed to vote, the other place would still have voted down the amendment, so this is not the best issue on which to challenge the authority of the other place. That can be done in a different way.
On the two significant crises about the authority of this place over the other place, the issues were Government legislation. The situation is made more complex by the fact that we are dealing with a free vote in both Houses.

Mr. David Winnick: rose—

Mr. Straw: If my hon. Friend will allow me, I should like to expand on a further point.
I do not know what the outcome would be if we went in for ping-pong with the other place, but we would certainly not get Royal Assent by the end of this week. That would not be satisfactory. Even if we abandoned the idea of Royal Assent by the end of this week, there is no certainty that the other place would decide to concede the point made by this House on 22 June. The net result could be that, unless we took other steps, the whole Bill,


which has been supported on both sides of the Chamber, would be aborted. I do not believe that it is either appropriate or necessary to take that risk.

Mr. Tam Dalyell: Will the Home Secretary give way?

Mr. Winnick: rose—

Mr. Straw: I must give way to my hon. Friend the Member for Walsall, North (Mr. Winnick) first; then I shall give way to my hon. Friend the Member for Linlithgow. (Mr. Dalyell).

Mr. Winnick: I regret, of course, the decision made last week, but I agree that the Bill must go ahead. Does my right hon. Friend agree that, if the House of Lords, or whatever it might then be called, were elected, it would have as much electoral credibility and legitimacy as the elected House of Commons, and that, bearing in mind how the life peers voted, such an elected Chamber would still have been likely to come to the same decision? Is that not a danger to the authority of the House of Commons?

Mr. Straw: That is an important point of view to be weighed in the balance when we deal with stage two of the manifesto proposals in respect of the other place. However, I happen to believe that other issues, too, will probably arise in which the question of clashes between the House of Lords and the House of Commons will come into play.

Mr. Dalyell: The Home Secretary and his officials have surely had brought to their attention the letter in The Times from a number of distinguished Law Lords, including Lord Ackner and Lord Wilberforce. What is the answer to their question why the amendment was not introduced at a much earlier stage? Why was it brought into the Bill at such a late stage? As one who has taken a view different from that of many of my colleagues, I am curious to know the answer to that question.

Mr. Straw: I shall explain in a second, why the amendment was introduced; the reason relates to proceedings before the European Court of Human Rights. As for the time scale, it was always judged that it was appropriate for the matter to be debated in this House first, before it went to the other place. Had it not been for the intervention of Northern Ireland legislation, there would, in my judgment, have been ample time for the matter to be batted backwards and forwards between the two Houses.
The debate took place on 22 June, the Bill came out of Standing Committee on 11 June, and our original plan was that it would come out of Committee in, say, early June, complete its Report stage by mid-June and, if possible, be considered by their lordships by the end of June. There would then have been ample time for further consideration.
I also make another point, to which I shall return in due course—that the issue of the age of consent, although very important, is a simple one. The question raised by my hon. Friend the Member for Bassetlaw (Mr. Ashton) is more complicated, but the age of consent is a simple issue that has been discussed on very many occasions in the past. With great respect to their lordships, I thought that

their least persuasive argument in favour of the position that the majority in that House took involved the late stage in the proceedings at which they had to deal with the issue. It is not as if the issue had not been for many years a well-known question, on which people had been able to form rather settled conclusions.
It would be helpful if, before turning to my proposals for dealing with the amendment, I set out the background and explained why the Government accommodated an amendment on the age of consent within the Bill before us.
Hon. Members may be aware that Mr. Euan Sutherland and Mr. Christopher Morris, with the backing of Stonewall, the gay rights organisation, took the United Kingdom Government to the European Court of Human Rights to argue that we were in breach of the European convention on human rights in setting a differential age of consent for homosexual and heterosexual activity.
We learned last summer that the European Commission of Human Rights was about to issue a preliminary finding in favour of Mr. Sutherland. Our legal advice was that it was nigh on certain that that finding would be confirmed by the full court in due course. Such a court ruling would in practice have obliged the United Kingdom Government and Parliament to legislate for an equal age of consent.
Because we thought—correctly, as it happened—that on a free vote an overwhelming majority of the House of Commons would favour setting the age of consent at 16, we judged that to contest the preliminary ruling would serve no purpose whatever, and would waste much public money on legal costs. We therefore sought an agreement with Mr. Sutherland, Mr. Morris and Stonewall by which they would stay their proceedings in the European Court of Human Rights on the basis of undertakings that we would provide.
Those undertakings, which were collectively agreed by the Government, were contained in a document lodged with the European Court on 21 October 1997. A copy of the full text of the undertakings has been placed in the Library—they are a matter of public record.
The undertakings have two principal components. First, we undertook at the "earliest appropriate opportunity" to have a free vote in the House of Commons on the equalisation of the age of consent. That is why we accepted that the Crime and Disorder Bill could be used for that purpose, although the scope of the Bill—which was already amending the law on offences—was such that, irrespective of whether the Government had agreed to include the issue in the Bill, it was rightly for the House to decide whether to amend it as some hon. Members sought to do.
Secondly, the undertaking said that, if a majority of the House of Commons voted in favour of a reduction in the age of consent for homosexual acts to 16,
the government will bring forward legislation to implement the will of Parliament, such legislation to be introduced in time for the consideration of such legislation to have been completed by the end of the next Parliamentary session"—
that is 1998–99—
at the latest.
Against that background, I invite hon. Members, albeit very reluctantly, to accept the decision of the other place and to remove the age of consent provisions from the Bill. As I explained to my right hon. Friend the Member for


Chesterfield (Mr. Benn), if the House rejected their lordships' amendments and sent the Bill back to the other place, there is every prospect that that House would again reject the amendments. That would prevent any prospect of Royal Assent until the spillover in late October.
Even in the spillover, there would be no guarantee that amendments to equalise the age of consent would be carried by the other place. In that event, their omission from the Bill would still have to be accepted by the House of Commons as the price of Royal Assent for the rest of the Bill. As the Bill is Government legislation that gives effect to manifesto commitments that all hon. Members of the governing party supported, I am not willing to play poker with it and risk all its provisions.

Mr. A. J. Beith: Does the right hon. Gentleman accept that the amendment could have been detached from the fate of the Bill if the Lords had been prepared to accept an amendment in lieu, which introduced an order power whereby the provision would not come into force except under an affirmative resolution of both Houses of Parliament? If the Lords had allowed the Bill to proceed on that basis, it would have remained open to them to make their decision later. Certainly a number of hon. Members, including me, who voted for the amendment would have felt happy that the provision was at least on the statute book, even though the Lords would still have had the power to determine whether the provision was implemented.

Mr. Straw: I accept that. Indeed, if the right hon. Gentleman does not mind me saying so, that useful suggestion came from me—it was one of the proposals that we considered in some detail. However, it became clear that it would not be acceptable to the supporters of the majority position in the other place, so, in the circumstances that we faced, it was not, frankly, a runner.
As I have explained, the provisions of the Parliament Acts cannot be invoked, as the Crime and Disorder Bill began in another place. In any event, we could not countenance a year's delay in gaining Royal Assent for the Bill as a whole even if those provisions could be invoked.

Mr. Benn: I have listened carefully to my right hon. Friend's arguments; the House may decide to accept his advice. Meanwhile, young people between 16 and 18 may be prosecuted by the police in circumstances totally different from any that have hitherto obtained—the elected House of Commons will have voted for the amendment and the Government will have given a solemn commitment to the European Court that they intend to legislate within a year to change the law. Can my right hon. Friend say whether he intends to indicate to the police that prosecutions in this category ought not to be proceeded with, given the two considerations of a treaty obligation and a free vote of the House of Commons? If that is not so, we shall get into a difficult and dangerous situation.

Mr. Straw: I regret to say that I cannot give such an undertaking. Bills are Bills, and they are mere proposals for law until they become Acts of Parliament. I see no

way around that. We seek to give effect to both the letter and the spirit of the undertakings that we entered into last October.

Dr. Norman A. Godman: The kind of prosecutions mentioned by my right hon. Friend the Member for Chesterfield (Mr. Benn) rarely, if ever, take place in Scotland. The Home Secretary talked about his reluctance to accept the decision taken by the other place. He should also be talking about the profound regret and anger in this place, where more than half of hon. Members voted for a measure that unelected people have rejected.

Mr. Straw: Speaking personally, I share the anger and regret of my hon. Friend and of many right hon. and hon. Members on both sides of the House. My position in favour of an equal age of consent at 16 is long standing and well known. I can provide some reassurance for my right hon. Friend the Member for Chesterfield by saying that recent parliamentary answers from the Minister of State, Home Office, my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael), said, to my recollection, that the number of prosecutions is about three a year.

Dr. Evan Harris: I hope to catch your eye later, Madam Speaker, but I did not want to lose the point made by the right hon. Member for Chesterfield (Mr. Benn). I raised the same matter in an early-day motion this morning, and I have tabled questions on whether the Government, through the Lord Chancellor or the Attorney-General, have any discretion over decisions to prosecute. Such decisions are taken by the Crown Prosecution Service, but the level at which decisions are taken could be subject to direction. Does the Lord Chancellor have any remit to give sentencing guidance in the interim period while a unique position exists? According to answers that I have had from Ministers, there were 14 prosecutions for people involved with people under 16, although the data are not clear on whether that relates only to the relevant sections of the Sexual Offences Acts, or to other sections.

Mr. Straw: I have no discretion over prosecutions, and it would be entirely inappropriate if I did. Prosecutions are in the hands of the independent Crown Prosecution Service. It is accountable to the Attorney-General, but he must exercise his judgment entirely independently, and that is exactly as it should be. It is constitutionally important that, as long as the law is the law, it stands to be enforced, and enforcement is a matter for the prosecuting authorities. There can be no dubiety about that.

Mr. Joe Ashton: I do not want the Attorney-General to receive the wrong message from the House. I accept that there should be no prosecution of boys aged between 16 and 18, but I hope that we do not bring about an amnesty for older men and child abusers who take advantage and think that they will get away with it.

Mr. Straw: I have made it absolutely clear to my hon. Friend and to the House that there is no question of the law, or prosecuting policy, being changed in advance of


any change in legislation. There can be no dubiety about that. To do so would be to render risible our procedures for bringing draft laws to be considered at length by the House before they are passed into law. The debate should not drift down what will be an inevitable cul-de-sac.
I have already explained why we cannot risk the Bill in ping pong before the end of the Session and why the Parliament Act does not apply. Even if it did, we could not risk making use of it as it would delay Royal Assent for a further year.
I propose instead—in return for the House accepting the Government's proposition that we reluctantly accept the decision of the other place—that we should detach the issue from the Bill and deal with it in separate legislation in the next Session. Therefore, the Government will honour the second of the formal undertakings given in the Sutherland and Morris case, by producing legislation on the matter in 1998–99. In doing so, there will be, as before, a free vote on the age of consent so far as the Government are concerned.
The Government are neutral on the matter. That arrangement follows a number of precedents, for example that of the Shops Act 1996, when the Government produced the legislation, provided a menu of alternatives and allowed free votes. The new legislation will be introduced first into this House, to ensure that it has the benefit of the Parliament Act should that prove necessary.
Finally, Madam Speaker—this is my last point in case you want to get back on the edge of your Chair—in the debate in the House on 22 June, my hon. Friend the Member for Bassetlaw moved amendments relating to breach of trust and the protection of vulnerable 16 and 17-year-olds. Although his amendment was defeated by 40 votes, we have never discounted the strength of the argument that he deployed in this House or that deployed in the other place.
The equalisation of the age of consent is a simple issue of removing a basic inequality in our law. It is an issue on which there are strong feelings and diverging views, but it is not technical or complex in itself. That was why we were content for it to be inserted at a relatively late stage in the passage of the Bill. I think that it is generally accepted that abuse of trust is not a simple issue in the same way; we discussed that at some length on 22 June. There are complexities in the definition of abuse of trust, in the behaviour, which is dealt with, in the interlocking with non-statutory safeguards that are already in place, such as professional codes, and in the relationship with current criminal law, under which any coercive sexual activity is already against the law and carries criminal sanctions.
As a consequence of those complexities, but also in recognition of the concern felt by hon. Members regardless of their opinion on the age of consent, the Minister of State, my hon. Friend the Member for Cardiff, South and Penarth, announced on 22 June that I had set up a review group to look into abuse of trust. The group's first meeting will be on 30 July and it will report by the end of the year—hopefully, earlier.
The review will concern both young men and young women, and in a non-discriminatory way. We will take account of the group's decision on whether legislation is necessary. I assure hon. Members that there will be no delay. I have asked the working group to deal with

abuse of trust as its first priority and to come up with proposals as quickly as possible. Any right hon. or hon. Members on either side of the House who wants to meet my officials to discuss the matter should write to me, and I will ensure that arrangements are made as quickly as possible. Precisely because the matter is complex, it is to the advantage of the House that we proceed by consensus, if possible.

Mr. Dalyell: On a Scottish point, can my right hon. Friend say whether, since a reserved power is concerned, the review group will also cover considerations of Scottish law?

Mr. Straw: I am grateful to my hon. Friend for that excellent question, and I wish that I immediately knew the answer. I am being given a variety of advice by my hon. Friends on the Treasury Bench, and I will try to give him definitive advice, hopefully before the end of the debate.
The position of young people in residential settings is to be a particular concern of the review group, as those young people have least recourse to outside help and advice. The review will consider the protection needed by both young men and young women, on the basis that both sexes should be treated equally.
I know that many hon. Members on both sides of the House will be disappointed that we have not been able to secure an equal age of consent in the Crime and Disorder Bill. I share that disappointment, but to insist on the amendment now would serve no useful purpose. It would not win round the other place; it would only delay the implementation of the Bill or risk its not being passed, which would be a grave disservice to our constituents.
To those who are, as I am, impatient to equalise the age of consent, I repeat that, next Session, we shall introduce legislation to ensure a conclusive resolution of the issue on a free vote and remove the unjustified discrimination that has persisted for too long. On that basis, and with great reluctance, I urge hon. Members to support the motion.

Sir Norman Fowler: I shall be very brief. I agree with the Home Secretary's advice that the House should agree with the decision of the other place. He cut it so fine in coming to the Dispatch Box that I thought that I might have to move the motion in his stead. As I voted and argued against the amendment in the first place, my reasons for agreeing with the other place are rather different from those put forward by the Home Secretary.
There are two main reasons why we should agree with the Lords on the amendment. First, like other hon. Members, including the hon. Members for Bassetlaw (Mr. Ashton) and for Exeter (Mr. Bradshaw), I took the trouble to listen to part of the debate in the other place. No one can complain about the general quality of the arguments. The House was packed and the different arguments were cogently put and listened to with care.


By any standard, there was a cross-section of speakers, including two bishops, a former chief rabbi and an ex-Labour member of the former Wolfenden committee.

Mr. Ben Bradshaw: Will the right hon. Gentleman give way?

Sir Norman Fowler: I knew that I should not mention the hon. Gentleman. He can rarely resist the temptation to intervene, so I shall allow him to do so.

Mr. Bradshaw: I want to put the record straight. Indeed, bishops were present for the debate, and the Bishop of Bath and Wells made the best speech of the evening. However, having spent my first long period in the Lords since coming to this place and having been inculcated with the idea that the Lords was a centre of wisdom, I can say that I have never in my life heard so much ignorance, bigotry and bile. My opinion of the views that were expressed and the way in which they were expressed is very different from that of the right hon. Gentleman.

Sir Norman Fowler: Strangely enough, I did not expect that the hon. Gentleman and I would agree in our assessment of the House of Lords. I expect that we can conceivably edge towards common ground in agreeing that a cross-section of views was expressed in the other place, that the arguments were listened to with care and that the Lords was absolutely packed from the beginning of the debate to the end.

Mr. Edward Leigh: Before we leave the subject of the House of Lords, I have a question for my right hon. Friend. The right hon. Member for Chesterfield (Mr. Benn) said that the other place is unrepresentative of the British nation. Has my right hon. Friend noticed the Gallup poll in The Daily Telegraph today, which shows that only 25 per cent. of the population want to lower the age of consent for gay sex to 16 and does he agree that the House of Lords therefore showed last week that it is in touch with the nation?

Sir Norman Fowler: I was not thinking of leaving the subject of the House of Lords, and I should like to return to the important point that my hon. Friend makes.
The debate in the other place was conducted as one would have hoped that a debate in any second Chamber would have been conducted. A cross-section of speakers took part. There was a free vote—not on party lines. As anyone who listened to the debate knows, that point was vigorously made, not by a Conservative peer, but by Lord Stoddart of Swindon. [Laughter.] I know that old Labour is very unfashionable—it must be very sad for old Labour—but I do not remember that, in my time as a Minister, Lord Stoddart was one of my greatest supporters when I laid measures before the House. He said:
This is not a party political issue. It is a cross-party political issue. There are people of both parties, and none, who take differing views on the amendment."—[Official Report, House of Lords, 22 July 1998; Vol. 592, c. 964.]
It is incorrect to say that the issue was carried by the hereditary peers. Life peers predominated among those who contributed to the debate and those who voted. In

the Division Lobbies, a former Labour Prime Minister, Lord Callaghan, voted against the change alongside the former Labour Northern Ireland Secretary and Defence Secretary, Lord Mason, while Tories such as Lord Newton and Lord Tugendhat actually voted in favour.

Dr. Harris: The right hon. Gentleman suggests that the House of Lords is a broad cross-section, but what does he feel was the average age of those taking part in the debate? I believe that, if he considered that, he would recognise that one need not be young—obviously, hon. Members throughout the House share my view on that, and vote accordingly—to believe in human rights on the basis of sexual orientation, but the House of Lords shows that it certainly helps.

Sir Norman Fowler: I do not know. Lord Callaghan may be over 60, or over 70—I cannot remember his age—but I would say, with some humility, that he has a dear sight more experience than even the hon. Gentleman.
People are starting to debate whether, if we are to have a second Chamber, it should be appointed or elected. There is an interesting conflict on the subject. I heard what the hon. Member for Walsall, North (Mr. Winnick) said. One must expect that, whatever type of second Chamber we have, it will disagree with the House on occasion, for perfectly sensible reasons. Moreover, as my hon. Friend the Member for Gainsborough (Mr. Leigh) said, at least two opinion polls have shown that the House of Lords more accurately reflects current public opinion on this subject than did the vote in the House of Commons.

Mr. Benn: In my opinion, this is about not the House of Lords but equality. I listened to bishops who believe that it is all right to join the Army and kill people at 17, but not to have sex with someone at 17. I heard Members of the House of Lords say, "Young people are not fit to make the judgment"—but they did not say, "Whatever age you are, you are not fit to elect us, because we are here for life." 
This is about democracy; and democracy in Britain is more important than a delay to the Crime and Disorder Bill or even—dare I say it—than the issue that we are discussing, on which I am wholly committed. We should not mock the idea of an elected second Chamber. My hon. Friend the Member for Walsall, North (Mr. Winnick) said that, if we had two elected Chambers, they might disagree; but, if he thinks about it, he will realise that, if we had held elections to two elected Chambers last May, the public would have elected the same sort of Members to both.
That is the issue that we are discussing—democracy. I hope that the right hon. Member for Sutton Coldfield (Sir N. Fowler) does not mock the idea just because The Daily Telegraph commissions an opinion poll which tells us that people agree with the tabloids, when they are whipped up to do so.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Nevertheless, the debate will be in good order if it remains within the substantive context of the amendments.

Sir Norman Fowler: I was about to make the same point, Mr. Deputy Speaker. I believe that the right hon.


Member for Chesterfield (Mr. Benn) has now made his speech, in any event. His major argument seems to be with the hon. Member for Walsall, North, not with me. In no way am I mocking democracy, but I do say that the case for changing the House of Lords has not been proven and that, even in this short debate, the divisions on what might replace the House of Lords have become apparent. I am perhaps not as concerned as the Home Secretary may be when he advances the Government's proposals—if they have any—in this area.

Sir Teddy Taylor: Does my right hon. Friend agree that there is a danger in getting too excited about this issue? Observing that prosecutions are simply not taking place following consideration of the matter by the European Court of Human Rights, will my right hon. Friend explain what possible difference it will make to anyone whether we say yes or no to the proposition?

Sir Norman Fowler: It makes a difference because the law sets out what is legal and what is not. My hon. Friend has put that point to me several times and I understand from where he comes—it is not an entirely unexpected position. However, I think that it makes a very substantial difference whether we make this change. My hon. Friend will no doubt wish to make his point in a moment in his usual inimitable fashion.
I shall deal now with the second reason why I believe that it is right to accept the Lords amendment. When we debated the matter in this Chamber a few weeks ago, I made the point—to which the hon. Member for Linlithgow (Mr. Dalyell) also alluded—that the effect of introducing the amendment at such a late stage was to present to the House a more or less "take it or leave it" proposition. We did not have time to scrutinise properly any amendments that might have protected young people, whether boys or girls. That concern was expressed in the debate, and the amendment moved by the hon. Member for Bassetlaw (Mr. Ashton) received wide support. Wide concern was also expressed about the report of Sir William Utting on the abuse of young people—I emphasise again that we are talking about boys and girls.
If the clause had been in the Bill from the start, proper consideration could have been given to the issues. It is a great pity and a great sadness that that was not the case. [Interruption.] I do not know whether the Minister of State, Home Office, the hon. Member for Cardiff, South and Penarth (Mr. Michael) wishes to intervene—he did so last time, but it was not a spectacular success and I advise him not to do so again.
The Home Secretary now says that new legislation will allow the House to consider properly any safeguards that are proposed. We shall have the time and the opportunity to do that. To be frank, I should prefer there to be no Bill and I oppose the change. I made my views clear on the last occasion. However, if there is to be legislation, the Home Secretary's proposal seems to be the right and proper way to proceed. We must not insert a clause into the Bill at a late stage because that does not allow many important issues to be considered properly.
I shall vote to accept the Lords amendment and I welcome that part of the outcome that the Home Secretary has advanced. However, I also congratulate the House of Lords on performing its traditional and valuable function of making the House think again.

Ann Keen: I assure my right hon. and hon. Friends and other hon. Members who supported the amendment that the right approach was taken. The House voted to recognise and value all young people in this country, regardless of their sexuality. The House does not wish to criminalise young people in a democracy, and the overwhelming vote on 22 June ensured that that would not occur.
I, too, reluctantly accept what has happened in another place. I have some pleasure in doing so because it means that we shall not be sending the amendment back to the other place where the facts may be distorted yet again and the noble Lords may again use offensive language in presenting their cases. They have done much damage within a short time to many young people and their families in this country. For that reason, if for no other, it is right not to send the matter back and for us to enjoy some aspect of democracy at the end of this Session.
I thank my right hon. Friend the Home Secretary for the way in which he has conducted the matter and for his undoubted assistance and help in, and commitment to, equalising the age of consent. I shall be proud when the Government introduce a Bill in the next Session and, if necessary—I hope that it is not—evoke the Parliament Act 1911, so that the democratically elected Members of this House of Commons can present their case, at the end of which the law will be changed.

Mr. Beith: The Liberal Democrats support the Crime and Disorder Bill. Although its claims have been somewhat exaggerated, we, too, want to see it on the statute book quickly. There was a free vote in both Houses on the issue which is the subject of the amendment. I was one of the large majority of my right hon. and hon. Friends who voted in favour of the amendment. That was not a view at which I arrived lightly, and some of my constituents do not share it, but, on grounds of equality of rights and of the general uselessness and unhelpfulness of applying the criminal law in the area of teenage behaviour, I felt it right to vote as I did.
Despite my disagreement with its conclusion, it is perfectly reasonable that the other place should invite the House of Commons to think again about the matter. However, it is not reasonable that its view should prevail over that of the elected House on an issue of fundamental principle and rights. It is part of the second Chamber's job to invite us to think again. It is doing so in circumstances, not perhaps of its choosing, when we appear unable to insist on our right without imperilling the Bill to which the matter has been attached.
This House would usually be saying to the other place in our response to its view of our amendment that we have thought again about its proposition, but that we are still of the same mind and wish the view of elected Members to prevail. We might have said that we had thought again about the matter and believe that the concerns of the other place might be addressed in various other ways. It is notable that its reason for rejecting the Commons amendment related to the vulnerability of young people.


It was apparent in the vote on the amendment tabled by the hon. Member for Bassetlaw (Mr. Ashton) that that concern was shared to a significant extent in the House—not to a sufficient extent to allow it to be carried but to such an extent that, even among those who did not vote for it, the Government rightly set about some work to determine whether it could be carried into law in a non-discriminatory way and would usefully add to the protections that already exist in the law for vulnerable young people. I certainly take the view that that work is valuable and I hope to see some result from it.
We could have told the other place that we would think about what it had said, but that we still believed that our view should prevail. Other things being equal, that is what I would expect the result of a free vote to be, but we are not in a position to do that without derailing the Bill.
The Government could have introduced another Bill and taken it quickly through the House, but that could lead to the other place arguing that it is not right that it should be expected to agree with a Bill that had been rushed through so rapidly. Another option, which I raised in an intervention and which would have been helpful if those in the other place who are pursuing the matter were prepared to accept it, would be to separate the matter from the Bill by means of an order-making power so that this part of the Bill would come into effect only when both Houses had voted to allow it to do so. The rest of the Bill would have proceeded into effect and the other place would have had that key for the lock and, without its turning it, the measure would not have come into effect. By the time that it had that opportunity, some progress could have been made on the concerns that the amendments with regard to the vulnerability of young people and those in positions of trust are intended to address.
The Government considered those options, but chose another—that of introducing a Bill in the next Session of Parliament, to which, in any case, they are committed by the nature of their undertakings in response to the situation created by the European convention on human rights. They gave undertakings, it was necessary that they should do so, and those undertakings will have to be carried out. I understand why they reached that conclusion and I in no way seek to disrupt the process of effecting that. However, some points have to be made clear.
First, the Bill must be a Government Bill. It would not be reasonable to hand the problem over to a co-operative Member at the beginning of the next Session of Parliament. That would be to expose it to all the risks that are attendant upon private Members' legislation and to deny it the protection that Government legislation has in its timetabling. It would be to invite yet another constitutional crisis whereby the Government have to consider whether to depart from their usual practice and give extra time to a private Member's Bill.
The spirit of what the Government have said seems to show that the Bill to be introduced in the next Session should be a Government Bill and that its ability to proceed should be protected in the usual way of Government business, while the issue remains a free vote issue for Labour Members as for Liberal Democrats.
The measure should not be tacked on to some sexual offences provision. It is about not paedophiles or marauding sexual offenders, but young people being

treated differently according to their sexual inclination, despite being the same age as those who face no legal penalty for actions which, however ill-advised or however much their elders might advise them against, are not against the law.

Mrs. Gwyneth Dunwoody: Will the right hon. Gentleman clarify exactly what he is saying? Is he saying that there should be a Government Bill which would relate only to the question of the age of consent and that it should be whipped through the House?

Mr. Beith: It is my suggestion, and I understood this to be what the Home Secretary said, that the Government introduce a Bill at the beginning of the next Session and that, as in the case of the Shops Bill, there should be a free vote on the central issue, in this case of whether the age of consent should be equalised at 16. I see Ministers nodding assent that that is their position.
Once the principle has been decided, as someone who has been a Member of the House for a long time, I would expect the Government to ensure that the legislation was enacted and was not subject to mere delaying tactics over a long period to prevent that from happening, and that, when the matter was again put to the other place, perhaps with some of their concerns having been addressed in the meantime, it will accept that that is the will of this Chamber.
Some secondary issues, which may clarify my reply to the hon. Lady, relate directly to the content of such a Bill. For example, if we merely change the law on the age of consent without doing anything else, it would be technically possible for some to have their names on the sexual offenders register for some years for something that is no longer a criminal offence. That is not acceptable, and it is a detail that could reasonably be remedied in the Bill. Even those who take a different view from me on the issue would not feel it right for someone to be labelled as a sexual offender when what he had done was no longer a criminal offence. Such matters could be dealt with in the Bill.
The Home Secretary referred to the amendments tabled by the hon. Member for Bassetlaw and the concerns that they raised. That will clearly need separate legislation because the matter is non-discriminatory in its intended scope. That was the hon. Gentleman's intention. Only the proceedings of the House tied him in framing the amendment. He was clear that his intention was to protect vulnerable young people, male or female, from sexual predation from males or females. I share much of his concern on that point and I hope that we shall make progress on that, but I think that it will require separate legislation to deal with it.
When we have, as we have here, an issue concerning the widening of liberty, after due consideration the will of the Commons should prevail and the Government must provide the opportunity to make that possible. On that basis, I encourage my right hon. and hon. Friends to accept that the Government are taking a reasonable way forward in the matter.

Mr. Ashton: I welcome the Home Secretary's decision to bring the new clause back as a separate Bill so that it


has better scrutiny, because there is no doubt whatever that the unusual way in which it was introduced left much to be desired.
We were told as long ago as last November that the Government would introduce the measure as part of the Crime and Disorder Bill. I tabled a question to the Home Office asking whether it would be part of the Bill, and was told that that was not the intention at that stage. I am not saying that the Home Office was not telling the truth; that was its intention at that time. I was asked to appear on television programmes such as Panorama, the presenters of which were absolutely certain that it would be part of the Bill.
At that stage, it was impossible to get hold of a copy of the Bill, which had not even had its First Reading. Indeed, as late as January, it was difficult to get hold of a copy. The question was always whether the provision would be in the Bill or not, and there was no definite answer.
I kept my eyes open to see what was happening with the Bill. I asked people in the Lords, whom I had known for many years in this House, whether the new clause would be tabled in the Lords. It was not. The Lords did not debate the matter and it was never put to them. It was simply tacked on to the back end of the Bill.
Although I have great respect for my right hon. Friend the Member for Chesterfield (Mr. Benn), whom I have known for many years, I am sure that, if other legislation had been put before the House in that way, he would not have found it acceptable. He has often said that war can be declared without the House debating it, and he is right; but effectively that is what happened with the new clause. There was no Second Reading or scrutiny in Committee. I kept an eye on it, wondering what would happen once the Bill came here from the other place. I shall tell the House what happened.
On Friday 12 June, the new clause was tabled, but not a soul knew about it. Although there was speculation that it was to be part of the Bill, it appeared in none of the Saturday or Sunday newspapers but was tabled quietly and discreetly on Friday 12 June, on a day when most hon. Members had gone home. That was done because, as everybody knows, there must be two weekends between tabling a new clause and debating it. The debate was then fixed within the absolute minimum time—a week the following Monday. That was a day when the football was on the television—[HoN. MEMBERS: "What rubbish!"] Nothing happens by coincidence in this place. I have been here for 30 years, in which time I have been a Whip and on the Front Bench. I can tell my hon. Friends who have not been here for quite as long that this place functions like an efficient machine.
It was impossible even to see the new clause until Monday 15 June. When I saw that the subject was to be debated—it was announced at business questions—I rang the Committee Clerk and asked when the new clause would be tabled. He told me that it had already been tabled the previous Friday. I got hold of a copy of it quickly and went to see the Committee Clerk, Mr. Paul Silk—I hope that he does not mind me mentioning his name. Those who say that the amendments are not watertight should be aware that the Committee Clerk drafted them for me and did a magnificent job. However, we could not table the amendments until Tuesday 16 June.

Given that the new clause was to be debated the following Monday, that left only Wednesday and Thursday to scrutinise the amendments and get people to sign them.
I am not saying that it was an impossible job. I went to the Susan Hamilton agency, which is on the premises, and had 600 letters explaining the amendments and 600 envelopes typed. Amendments are no longer published every day as they used to be; we have to wait until Thursdays to have them published, so nobody knew that my amendments had been tabled. I sat stuffing letters into envelopes until midnight. A good Christian movement charity called Care asked whether I wanted some help, so Care finished putting the letters in the envelopes—[Interruption.] My hon. Friend the Member for Exeter (Mr. Bradshaw) laughs, but I am describing the difficulties of a Back Bencher taking on a Government. My hon. Friend may be in the same position one day and he will then see the difficulties for himself.

Mr. Ben Bradshaw: I do not want to malign Care, but my hon. Friend might like to know that a young girl from my constituency wanted to work for me at the beginning of this Session. It had all been set up, but, at the last minute, Care discovered about my sexual orientation and she was prevented from doing so. We know exactly where Care is coming from. The irony is that my hon. Friend the Member for Brentford and Isleworth (Ann Keen) has a placement from Care in her office.

Mr. Ashton: It is the oldest trick in the book to denigrate by abuse when one does not have a brief. With all respect to my hon. Friend, that is what the media do and what cheap-jack lawyers do when they have no brief—they denigrate witnesses—[Interruption.] My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) is an expert on verbal abuse, but let us not get sidetracked.
I am trying to explain to my hon. Friend the Member for Exeter, without being patronising, that when a Back Bencher takes on the Government, he has a job on. The Bill with which my hon. Friend was involved was given time and maximum help by the Government. He was very privileged, because I know of no other Back-Bench issue, whether it is fox hunting or whatever, that has had such a fair wind behind it. That has been his experience; when the situation is reversed and he finds himself taking on the Government without such back-up, he will be glad to accept help from anybody, without examining what he or she has done or not done. I was one Back Bencher taking on the Government.
Let me continue the story. The 600 letters had to be distributed, and I had to get people to sign the amendments. I could have got 100 people to sign them, but I chose very experienced people like my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who sits on the Speaker's Panel, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who is chairman of the Liaison Committee, and others who have been in the House for a long time. They readily signed the amendments, although I could not get enough signatures because of the shortage of time.
I am trying to illustrate how this Back-Bench provision was railroaded through the House—"railroaded" is the only word for it. Let us look at what happened on the day. We were promised a free vote. We had a free vote on the


main clause, but when my amendments were called, the Chief Whip said, "The free vote is off. There is no free vote on your amendment." There was enormous confusion about that. We managed to get the amendment called, although when the Government tabled the new clause, they timetabled it. If Government business is timetabled, it gets three hours and one vote. Thus, the only vote that would have been allowed under the Government's proposal was a vote on the new clause—a Government-backed vote. My amendments could not have been voted on. However, I raised the matter with Madam Speaker and she agreed with the then Leader of the House that my amendments would be called. No end of barriers were put in the way of that so-called free vote.

Mrs. Dunwoody: There was not too much confusion, because Government Whips were standing at the entrance to the Lobby making it clear that it was a Government vote. When I pointed out that it was a free vote, it seemed to come as a considerable surprise.

Mr. Ashton: My hon. Friend is an experienced Member. She came here in 1966 and has seen everything that can happen, so her remarks are of great value.
On the first free vote, which would have been the only free vote had it not been for the Speaker's ruling, there was a majority of 207. Within 15 minutes, that majority had fallen to 40, with at least 50 people abstaining—the Government Whips were telling people not to vote in what was originally a free vote. One Whip even voted against reducing the age of consent to 16 and then had to vote against my amendment because the free vote was taken off.

Mr. Tom Levitt: Does my hon. Friend know of an hon. Member who voted contrary to how he or she wanted to vote on that night? I heard no complaints that people were railroaded into voting against their will. Should not the Government have given a new clause that had such strong support in the Chamber the best possible avenues to be debated and to become law? Is not one of the outcomes of that the fact that the Home Secretary has given assurances that the points raised in the amendments will be looked at carefully by the Home Secretary's panel?

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Mr. Ashton: My hon. Friend makes a wide intervention covering three points—something that he would have been better off doing in the debate. I shall try to deal with them. There was not a free vote on my amendment; people were dragooned against their will. I could name them, but I shall not, for fear of embarrassing them. He can check the voting records—people on the payroll vote were told to vote against my amendment, and did. It still lost by only 40 votes, and at least 50 hon. Members were told, "Stay in the Corridor if you don't want to vote." They were whipped against my amendment.
I am not arguing about that, because that is politics and what the game is all about. All that I am doing is revealing to hon. Members what happened and why there should be proper scrutiny of the measure. It should go through

Second Reading, Committee, Report and Third Reading like other legislation, and it is totally unfair that a highly controversial issue affecting everyone in the community was not scrutinised.
The House set up a system of Special Standing Committees. I was a member of the Modernisation Committee, which said that it would sometimes be helpful to have a mini-Select Committee or a Special Standing Committee to which people could give evidence at the start of consideration of a Bill. People in positions of trust or supervision could have given evidence to such a Committee, as could Stonewall, but there has not been even a Select Committee investigation into this matter. That is the essence of democracy. People talk about democracy in the House of Lords, but there is another aspect of democracy, which is the public having a say and being able to give evidence. There was no question of any sort of Special Standing Committee.
I accept that there was a slight problem with my amendment—not a legal problem, but a difficulty in that abusers who are caught are not prosecuted, at any age. Public schools do not want the bad publicity of a prosecution, because parents would take their kids away; councils, as with Islington council, carry such stigma after prosecutions that they go to great lengths to avoid them; and insurance companies put great pressure on councils not to have a prosecution, because they would have to pay compensation to the abused youngster. There is clandestine agreement not to prosecute so that the abuser is sacked, but does not go for unfair dismissal because he does not want publicity, and then rings up the network and moves, for example, from Nottinghamshire to Derbyshire next door.
Those questions should be examined, but there was never any move to examine them or any time given for that. The debate lasted three hours in this place and two and a half hours in the other place.
My amendment would also protect young women aged 16 or 17 who are being harassed at work by their boss. At present, they have to go through the paraphernalia of going to a tribunal, but, under my amendment, they could say to their boss, "Hands off, I'm under age." None of this has ever been examined—it is all being bounced through. That is not democracy, any more than the House of Lords is democracy, which is why I support my right hon. Friend the Home Secretary.

Ann Keen: My hon. Friend is confusing the argument, because the age of consent is a totally separate issue—it is about human rights equality. Many of us find offensive the suggestion that those who agree with equalisation of the age of consent have no care for the protection of all young people, especially the vulnerable. Everyone wants that to be discussed, and we want that law to be enforced properly.

Mr. Ashton: I have never said that, and I said in my opening remarks in the previous debate that gays were not child abusers, but the age of consent is a major deterrent to anyone who is thinking of abusing a young person. They know that is against the law and carries severe penalties. [Interruption.] I am being called "crazy"—abuse again.
In 15 minutes, I have raised half a dozen points that were never debated or analysed, or considered by a Committee. They were simply thrown in and bounced


through; that is not democracy, and my right hon. Friend the Home Secretary is absolutely right to say that we should start from scratch with a proper Bill and thorough scrutiny.

Mrs. Jacqui Lait: I am grateful for the opportunity to support the Lords opposition to the Commons amendment and the Government's proposal for a separate Bill, which we will now be able to discuss at much greater length.
The hon. Member for Bassetlaw (Mr. Ashton) brought into sharp focus some of the problems surrounding the change in the age of consent. I support what he said, but would go further, which is why I supported the amendment of my hon. Friend the Member for Reigate (Mr. Blunt) in the brief and heated debate on 22 June. I seek assurances from the Home Secretary that the working group will take on board a point that was brought home to me by the national missing persons helpline, of which I am a trustee. It raised the issue not of youngsters who are abused by people in a position of trust, but of youngsters who have left home and are even more vulnerable.
Such youngsters can sometimes be brought into a life of abuse through the rent boy, or even rent girl, system, where youngsters are almost offered for sale to those who are looking for sex with young people. As the age of consent comes down, the vulnerability of such people increases and the age at which youngsters could be abused also comes down. I accept that there is a law governing that form of abuse, but it is not being used. The staff of the national missing persons helpline regularly have to deal with youngsters who find themselves in such a situation. I am sure that they will take up the Home Secretary's offer to meet him and his officials to discuss the issue, which comes into sharp focus in discussions of any reduction in the age of consent. I hope that the working party will take all that on board.
I am most grateful to the House of Lords for the opportunity to bring this issue to the notice of the House and, I hope, have it dealt with effectively in the new legislation.

Mr. Benn: I shall be brief. There are separate issues here; my hon. Friend the Member for Bassetlaw (Mr. Ashton) raised the abuse of anyone of any age by people in positions of trust. That has nothing whatever to do with the age of consent—a mentally handicapped person aged 45 and in care could be abused.
My hon. Friend talked about things being railroaded into the Bill—I shall come to that in a moment—but if ever there was a railroading it is his amendment, which has nothing to do with the age of consent. There are vulnerable people who need to be protected, and I am sure that my right hon. Friend the Home Secretary, given enough time, will introduce legislation to deal with such protection.
On the question whether we should agree with the Lords, you, Mr. Deputy Speaker, warned us that the debate is about the opposition of the House of Lords to a Commons amendment, but dare I say that the motion states that we do not insist on resisting the Lords opposition? We have to give some attention to the source of that opposition.
There is a history to this matter. The Conservative party likes the House of Lords, because it has always had a Conservative majority. This is not a party matter, but, as

Conservative Members know very well, Labour Governments have four years in office and Tory Governments have five, because the Lords can always turn its power of delay into a veto. I have sat in Cabinet many times; as I mentioned in an intervention, I have heard a Labour Leader of the House of Lords say, "I do not think that we should proceed with that—the Lords will delay it and that will wreck our legislation." I have a marked objection to that.
I also have an objection to the authority of the second Chamber. Although I was brought up as a member of the Church of England and should have due respect for the bishops, I know what a bishop has to say to become a bishop. He does not only take an oath of allegiance, like us; he says, "I accept Your Majesty as the sole source of ecclesiastical, spiritual and temporal power." Bishops thus declare that they do not believe in democracy in order to become bishops. That was imposed on them by Henry VIII. When I hear a bishop talking about consent of any kind, I bear in mind the fact that the man got where he is by swearing that he did not believe in what this whole place is about—although, of course, there are good bishops and bad bishops.
The next question concerns accountability. When I was elected as Member for Chesterfield, everyone in Chesterfield knew my view on the age of consent, because I had introduced a Sexual Equality Bill in 1989. People with an interest in the subject have written to me, and I am still writing back to them. The voters elected me, not necessarily because they agreed with my view on sexual equality, but in the knowledge that it was my view. Next time around, they can decide whether they still want me on the same basis. Their lordships, however, are not accountable to anyone—not even the appointed peers. Of course, every hereditary peer is descended from a peer who was appointed, so there is not much difference. A king used to do the appointing; the king has now moved to No. 10 Downing street, but the basis is the same. Hereditary peers are appointed in the same way as life peers.
If I were in an aircraft and the pilot said, "I am not a pilot myself, but my grandfather was a pilot", I would leave the plane at once. If I went to the dentist and he said, "I am not a dentist, but my dad was a dentist in the 1920s—open your mouth", I would not listen to him for five minutes. Now we are told that we must respect their lordships' opinions. I respect the opinions of peers as citizens, but I do not accept that they have a right to frustrate the House of Commons.
I know that the Crime and Disorder Bill is important, but, as I have said, I think that democracy is more important than any single Act passed by a democratic House. I challenge the Lords to throw the Bill out. They have been prattling about law and order ever since I was born. Do hon. Members imagine that they would insist on their amendment and destroy the Bill? Of course they would not; if they did, they would be putting their heads on the block and inviting the abolition of their House.
We should have taken a stronger line, and I am disappointed that we did not. We did the same with the fox-hunting legislation: we ran away from the Countryside Alliance and the House of Lords. We have got into the habit of accepting that that place has merit, has judgment—

Mr. Deputy Speaker: Order. I think that the right hon. Gentleman has taken licence enough. Amendments


from the other place, whatever the Bill, are debated not on the basis of whence they came, but in terms of the long title of the Bill.

Mr. Benn: You have been generous, Mr. Deputy Speaker. You have given me a certain licence, because I have had some experience. When my blood turned blue some years ago, I was thrown out of this place—which was a funny thing to happen—but I turned it red again, and came back.
My hon. Friend the Member for Bassetlaw said that the measure had been "bounced". Responding to one of our hon. Friends, he used the phrase "When you have been here as long as I have… ". Dare I say the same to him? Homosexuality has been on the agenda of the House of Commons for years. I do not remember Oscar Wilde, but I believe that he was engaged in an activity that the House of Lords would have regarded as entirely undesirable. I remember the setting up of the Wolfenden committee, and the debates on that committee. I remember the debates on clause 28—and, as I have said, I introduced my own Bill. The idea that those poor peers were taken by surprise, finding out that there was such a thing as homosexuality—when they had all been to public schools where it was rife—is ludicrous.
I know that my hon. Friend the Member for Bassetlaw feels that the Bill was not properly handled. If I had been Home Secretary—an opportunity denied to me, alas—I would have put the measure in last October. I am sure that the Home Secretary will follow my advice; but do not let anyone tell us that it was a big surprise to the Lords to discover that such practices are engaged in even by 16-year-olds.
When the Question is put, I shall shout "No" on principle. I do not suppose that it will be possible to find another Teller, but I shall at least have the satisfaction of making my voice heard in support of democracy. I very much hope that everything that the Home Secretary said will prove true—I am sure that he is right—and that, in the autumn, this matter will be disposed of once and for all, along with the Chamber that has caused all the trouble.

Mrs. Eleanor Laing: I supported the amendment that we discussed on 22 June. I would have preferred the amendment passed by the House of Commons to stand, but—in sharp contrast to the right hon. Member for Chesterfield (Mr. Benn)—I utterly defend the right, indeed the duty, of the House of Lords, while it is the second Chamber, to ask the House of Commons to think again.
This is not the first occasion on which we have discussed that matter of principle in recent weeks. Having accepted that the House of Lords was right to send back to us, twice, the issue of tuition fees for students from England and Wales at Scottish universities, to be consistent I must also accept—and I do accept, as a matter of principle—that the Lords have a right and a duty to send back this amendment, although I happen to disagree with them.
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I appreciate that—as the Home Secretary explained—if the House disagrees with the other place today,

the whole Bill may well be lost. However much hon. Members may care to speculate on the way in which the House of Lords may or may not react if the amendment goes back to it, there is no doubt that it is our duty to protect the rest of the Bill. Conservative Members did not vote against the spirit and general intention of the Bill. Along with some of my hon. Friends, I served on the Standing Committee. We discussed the Bill for many hours, and, although some of us disagreed with the details, we did not disagree with the principle. We do not want the Bill to fall.
The right hon. Member for Chesterfield may agree with this point. The Bill, which we debated so carefully in Committee, abolishes for ever the death penalty for all the remaining crimes to which it still applies. If the Bill is lost, that is one provision that will also have fallen by the end of this week. As in other instances, there is good and bad in the legislation, but—strangely—I agree with the Home Secretary: there is more good than bad in it.
Unfortunately, the Government's business managers—I do not know to whom they are accountable—

Mr. Straw: Neither do I.

Mrs. Laing: I have every sympathy with the Home Secretary. It is a great pity that the Government's business managers did not manage this piece of business rather better. We could have had an opportunity to debate the matter fully, in the House of Commons, in the other place, in the House of Commons again and in the other place again, for however long it took to sort out the way in which this Parliament—as a whole Parliament—was going to deal with the matter. We are now at the end of a Session, however, and although I can blame the Government's business managers, we can do nothing about the legislation at the end of July.
I have heard it said that the Home Secretary has discussed the whole issue with some of the amendment's sponsors. No one has discussed it with me, but I accept that the Home Secretary has undertaken to introduce legislation that would have the same effect as the amendment that the House of Commons overwhelmingly agreed to.

Mr. Leigh: My hon. Friend is an interesting barometer, as a Conservative Member who supports the legalisation for gay sex at 16. Is she aware that various supporters of the legislation—homosexual organizations—want to attach to the new Government Bill other provisions, such as the repeal of clause 28, which banned the promotion of homosexuality in schools? Labour Members shake their heads—but if that were so, would my hon. Friend support a new Bill in the next Session? [Interruption.]

Mr. Deputy Speaker: Order. I use this opportunity to apologise to the hon. Lady and to tell her that she should not be tempted to stray into territory that is well outside the scope of the amendment.

Mrs. Laing: I note your warning not to stray, Mr. Deputy Speaker. I never do.
I would not vote to repeal clause 28; nor would I align myself with some of the militant gay rights people who protested outside the other place last week. However, I agree with the sensible and reasonable promoters of the


amendment who have conducted themselves with great honour and dignity throughout. I welcome the Home Secretary's assurance that the Government will present a measure in the next Session, because that will give the House and the other place an opportunity to debate the issue of duty of care, which was mentioned by the hon. Member for Bassetlaw (Mr. Ashton). I supported his amendment of 22 June, and I support the principle that he and the hon. Member for Brentford and Isleworth (Ann Keen) mentioned—that the law should protect young men and young women.
The House has sent a clear signal that it does not approve of discrimination on the ground of sexuality. I have been surprised by the number of complimentary letters and messages that I have received in the past month on this matter.

Mr. Andrew Robathan: They were not from me.

Mrs. Laing: I nevertheless received many messages.

Mr. Desmond Swayne: Is my hon. Friend aware of the recent sheaf of opinion polls, not least the one in today's issue of The Daily Telegraph, showing that their lordships are more in tune with public opinion than is the House?

Mrs. Laing: I am aware of that, but I have said many times that I do not believe in opinion polls and do not trust them. I do not know anyone who has ever been questioned by an opinion pollster. At many public meetings, the issue of opinion polls has been raised in the context of their being a measure of the popularity of Labour Members. At those meetings I have asked year after year whether anyone has ever been questioned by a pollster or whether anyone knows someone who has been so questioned. The answer has always been no. I give as much credence to today's opinion polls as I give to any of the others.

Mr. Robathan: I used to take exactly the same line as my hon. Friend and always said that I did not believe in opinion polls. However, on 1 May last year I had to change my mind.

Mrs. Laing: I take my hon. Friend's point, but I still do not believe in opinion polls.

Mr. John Bercow: Perhaps we can take the argument a stage further. Would my hon. Friend agree that, even if public opinion opposes the equalisation of the age of consent for homosexual activity, she has a right and a duty to express her opinion as she thinks fit, and to vote accordingly? That is part of the purpose of this place and she need not be embarrassed about it.

Mrs. Laing: I thank my hon. Friend for his wise words. As usual, he is right. As I and other hon. Members have said, it is sometimes the duty of hon. Members to lead, not to follow. If we spent the whole of our parliamentary life simply following opinion polls and bowing to popularity, we would not be doing our duty or fulfilling the purpose for which we have been elected.

Dr. Harris: Rather bizarrely, I find myself in agreement with the hon. Member for Buckingham

(Mr. Bercow). The hon. Lady should be reassured by the fact that there is just as big a majority in favour of equalisation as there is in favour of reducing the age of consent to 16. Since a measure to increase the age of heterosexual consent to 18 would probably be unworkable, opinion polls pose a dilemma for us all. Thank goodness we have our consciences to follow.

Mrs. Laing: The hon. Gentleman makes an excellent point about opinion polls—answers to such polls depend very much on the questions. One of the first rules that an apprentice solicitor or barrister is taught is that he must never ask a question to which he does not know the answer. We would delude ourselves if we assumed that opinion pollsters asked questions without intending to achieve a particular answer. The past five minutes of debate have put opinion polls firmly in their place, even those that appear in The Daily Telegraph.

Mr. Robathan: The same goes for focus groups.

Mrs. Laing: I agree with my hon. Friend. I also agree with the Home Secretary and with my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler). Although they approached the question from different angles, they reached the same conclusion. I urge the House not to disagree with the other place.

Dr. Harris: The Home Secretary's opening speech seems some time ago. I was struck by his sincerity, and no one can doubt that he supports the move to reduce the age of consent. We can all see the reluctance with which he advises hon. Members not to insist on the amendment. If he retains that sincerity and can reassure me on some small points and some rather larger ones, the right hon. Member for Chesterfield (Mr. Benn) will not get a second Teller for a Division.
People feel strongly about this issue and, as on 22 June, I was again today struck by the eloquence of the hon. Member for Brentford and Isleworth (Ann Keen) who, without notes, delivered a strong speech in favour of the stance that we both hold. She advised the House to accept the Government's reluctant advice not to insist on the amendment. The campaigning records on this issue of the hon. Members for Enfield, Southgate (Mr. Twigg) and for Exeter (Mr. Bradshaw) are far longer than mine. However, there are different shades of view between us on the best way forward and they must be recognised.
The hon. Member for Epping Forest (Mrs. Laing) and I supported the cross-party, Back-Bench amendment. At the enjoyable press launch of that amendment, we spoke passionately about our belief in the equality and respect for human rights that the amendment would introduce. I said that I approached the matter from a human rights perspective. I was attacked at school, although not often, for being a member of a minority because I was the only Jew in the school. I remember with horror the hard time that was given to boys who were thought, usually incorrectly, to be homosexual. I recall with shame that at an early age, I did not distance myself from snide remarks in the playground.
It behoves us all to remember that we are discussing a minority that is still subject to entrenched discrimination of a kind that no other minority has to tolerate. Such prejudice is often based on ignorance or on strongly held


although misguided religious views. I regret that I was not invited to join the press launch of the compromise agreement that the Government have urged us to support, especially as I withdrew my early-day motion calling on the Government to press for the retention of the amendment because I accept their argument about the need to retain the Bill.
I felt on 22 July that I was following Stonewall's line. It issued a press release on 22 July calling on the Government to do everything in their power to ensure that the House's view would prevail and that the age of consent amendment would be included in the Bill. I now know that Stonewall has changed its view and supports the Government's current plan. We must respect the views of Stonewall: it has campaigned on this issue far longer than I and other hon. Members have. If it had told me of its change of view, I would have withdrawn my early-day motion sooner.

Ann Keen: I do not know why the hon. Gentleman says that, because we have been in touch on numerous occasions. That contact has been made.

Dr. Harris: I do not want to start a debate about whether contact was made. I asked Labour co-signatories to the amendment whether there was any news about the negotiations, and I was told that there was no news. I contacted the Home Secretary's office twice last week, and I asked at business questions whether the talk in the press of consultation with the signatories to the amendment included all parties. The hon. Member for Epping Forest also made that point. I was not given that assurance at business questions, but the Home Secretary's office told me that he would do his best during this busy period to contact me and ask me for my opinion on the position. Perhaps because of the speed of events and his other duties, especially yesterday, he was regrettably unable to do that.
I was concerned that on "Breakfast with Frost", the Home Secretary said that he had consulted the signatories: perhaps he meant to say some of the signatories. I am taking this opportunity, with your permission, Mr. Deputy Speaker, to ask the questions that I would have asked the Home Secretary had I been consulted on this compromise.
The key point is that, if we follow the Government's advice, it will appear to the outside world that those of us calling for liberalisation and equality in this area of the law have been defeated. Regardless of the motives of those who voted against equality in the other place, Baroness Young's victory in defeating the equalisation measure will be seen—and has been by people who have contacted me both from the gay community and from among the prejudiced—as a victory for homophobia. That is sad, although I do not attach any blame to the Government.
When we consider where to go from here, we must bear in mind the fact that this defeat for us and victory for homophobia will have several effects. First, it will make it more difficult—but not, I trust, impossible—to implement the full agenda for equalisation of the criminal law, including, for example, the decriminalisation of the victim in age of consent matters. I refer to the abolition

of the unique provision of this law that makes a criminal out of the victim of an act that is currently a crime, and of the unique provision that makes illegal all gay sex in private with more than two people present. That will now be more difficult to achieve, and we shall have to make greater cross-party efforts to maintain the momentum.
Secondly, we shall also have to face the fact that, in the next few months, there will be more homophobia in society, be it deliberate and malicious, or instinctive and based on ignorance. My postbag on this issue has never been particularly large, but it has changed markedly and is now more homophobic and nasty—that is the only way in which to describe, some of the letters I receive on this subject. I fear that there will be a backlash fuelled by the public defeat of liberalisers, of which the gay community may be a victim. If the Government accept that analysis, they will be very concerned, as will many hon. Members.
Thirdly, I fear that the Lords will be emboldened when this issue is considered again. That makes delay of the next attempt more likely. Next time, the Government must at least threaten to use the Parliament Acts.

Mr. Robathan: The hon. Gentleman accuses those who dislike the amendment that the Lords rejected of being homophobic. He said that it was a victory for homophobia. Does he accept that many of us who believe that the homosexual age of consent should remain at 18, far from having a fear or dislike of homosexuals, happen to believe that the matter is best left to individuals, and that we should protect people between the ages of 16 and 18 from people for whom they may not be ready? We do not have a fear of homosexuality: we think that we should protect young people.

Dr. Harris: I said that it would be seen as a victory for homophobia regardless of the motives of those who voted against equality. Some people may have voted against equality not because of prejudice—homophobia is a prejudice, not fear. The expert evidence from the British Medical Association and the National Society for the Prevention of Cruelty to Children shows that there is no physical, medical or social reason for such discrimination: it is discrimination pure and simple. Well-intentioned people may give other reasons for their view, and I would not use such a pejorative term of hon. Members. However, I have received letters saying that homosexuals should burn in hell. It is fair to the hon. Member for Blaby (Mr. Robathan) to make that distinction. The result of the vote in the Lords gives power to, and boosts the morale of, people who hold the nastiest views.
With the benefit of hindsight—and even this all-powerful Government do not have the gift of hindsight—it would have been better not to attempt reform in this Bill, as it was not going to succeed. When the issue is reconsidered, the Government should bear in mind the fact that an atmosphere has now been created.
The nub of the matter is that every effort should be made in future legislation to dissociate this measure for equality from measures relating to child sex abuse and abuse of trust, however important they may be—I believe such measures are important. They are separate issues. I made that point in an amendment to early-day motion 1612, which
calls on the Government to ensure that in future legislation the equalisation of the age of consent at 16 is not linked directly with the issues of child abuse and abuse of trust which are not directly related to the ending of discrimination against gay men.


It is anathema to people who feel that they are discriminated against to associate actions to bring their treatment in line with our treaty obligations in the European Courts and with decent human rights with action on child sex abuse. Although, sadly, we cannot prevent the association being made in the press, that terrible crime is not associated with homosexuality. It is an abuse of power, and is committed almost entirely by heterosexual men, mainly because they make up a greater proportion of the population.
I have read carefully the letter that the Home Secretary sent to the hon. Member for Brentford and Isleworth. I note that the Government's compromise is the minimum that the Government had to do to fulfil their legal obligations in the European Courts. I welcome the Government's undertaking to fulfil those legal obligations. I received a copy of this letter from a colleague: I was not sent one myself, which is regrettable. It says:
The Government will honour paragraph 2 of the formal undertaking given in the Sutherland and Morris case, by bringing forward legislation on this matter in the next session (1998/9). In doing so, there will be, as before, a free vote on the age of consent so far as the Government is concerned.… The legislation would be introduced first into the Commons in order to ensure the benefit of the Parliament Act if this proves necessary.
The only more minimum minimum action—if that is not a contradiction in terms—would be to use private Members' legislation. Like my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), I welcome the fact that the Government do not intend to use such a chancy procedure. I also welcome the fact they will introduce the measure in the Commons first, and allow the Parliament Acts to be used if necessary. That may be required to get it through in that Session, and is, perhaps, above the minimum minimum action to meet the legal obligation.
I am concerned about that paragraph in the Home Secretary's letter. It says that legislation will be introduced, and that there will be a free vote on the age of consent. That implies that other legislation may not be on a free vote, and may include measures on other issues as well as the age of consent. A later paragraph in the letter refers to the discussion on the breach of trust, relating to the amendment proposed in June by the hon. Member for Bassetlaw (Mr. Ashton).
The Home Secretary said that he would set up a review group to look at the issue. He also said:
We will take decisions in the light of the conclusions of the review as to whether legislation will be necessary.
As I made clear earlier, I am seeking some reassurance—which was apparently given at the press conference last night, but is not contained in this letter—that legislation on the age of consent will not be directly associated with, but will be entirely separate from, any measures to deal with child sex abuse or the recommendations of the Utting report, which clearly need to be implemented. If the Home Secretary cannot reassure me on that point, I fear that, over the summer and into the autumn, it will become easier to associate human rights for gay men with child sex abuse.
My right hon. Friend the Member for Berwick-upon-Tweed, who speaks from the Front Bench on these issues, referred to the need to ensure that people on the sex offenders' register for acts that would no longer be illegal would be removed from that register. The Public

Bill Office drafted an amendment with the aim of ensuring that people convicted under the Sex Offenders Act 1997 would not be subject to registration requirements after Royal Assent to a measure that decriminalised their offence. I do not believe that it is difficult for the Government to frame such legislation—it is a consequential amendment to the main measure. It could be introduced without widening the scope of the Bill to include extraneous matters.
I ask the Home Secretary to comment on the undertaking given by the Minister of State, Home Office, the hon. Member for Cardiff, South and Penarth (Mr. Michael), on 22 June, in response to a debate on my new clause 4 about privacy provisions. He said that there would be a review of those measures that appeared to be discriminatory, and I was pleased to hear him say that from the Dispatch Box. He said that there would be a review of discrimination in criminal law, with a view—I hope—to the Government bringing forward legislation if they saw fit to end that discrimination.
In that debate, I mentioned the Labour party's manifesto commitment to end unjustifiable discrimination wherever it existed. I hope that the Home Secretary will confirm that any new Government measure to deal with the age of consent will not prejudice any future Government measure, which I hope will be introduced very soon, to clear out all the discriminatory measures in the Sexual Offences Acts 1956 and 1967. I want an assurance that a Bill to deal with sexual offences will not kick these other issues into the long grass. Without that, there would be a risk of multiple amendments being tabled to that Bill to show the Government how strongly not only the gay community, but many other people—including some Labour Back Benchers—feel about the discriminatory nature of the current privacy provisions of those laws.
I draw the right hon. Gentleman's attention to what I think was an inadvertent answer to a written question from me, when I asked about convictions under the Act. He replied that
such an act is not regarded as taking place in private if two or more persons are present."—[Official Report, 22 June 1998; Vol. 314, c. 358.]
Hansard should be corrected to read, "three or more persons"; otherwise, people might think that the right hon. Gentleman held a much more illiberal view than that which I believe he holds.
I want to reiterate the point made by the right hon. Member for Chesterfield about the problem of continuing prosecutions and convictions for a consenting victimless act between gay men between the ages of 16 and 18, without there being any benefit to the cause of justice. I do not ask for the law to be changed or for the Government to interfere in the decisions made by an independent prosecution service; I merely ask whether the Attorney-General could request that, in the interim, decisions to prosecute could be made at a high, albeit independent, level within the Crown Prosecution Service. I do not expect the Home Secretary to answer me now; indeed, I intend to table a written question on the matter. The decision should not be left to individual junior prosecutors who may, sadly, be fuelled by the current debates on the issue.
5.45 pm
I recognise the Government's reluctance to ask the House not to insist on their amendment. I urge the Home Secretary to respond to the points that I have raised. I hope that, in future, he will try to retain cross-party Back-Bench support for the views that we know that Ministers hold as individuals, and which are held by the vast majority of hon. Members. We need to get legislation on the statute book as soon as possible.

Sir Teddy Taylor: I feel rather inadequate in this debate, so I simply want to ask the Home Secretary three pedestrian and practical questions. I appreciate that many of my hon. Friends believe that far greater issues are involved. I, like you, Mr. Deputy Speaker, have had the pleasure of listening to rabbis, bishops and former Prime Ministers on the radio saying, in effect, that the whole moral fabric of the country is involved. Others argue that freedom and liberty are involved. The right hon. Member for Chesterfield (Mr. Benn), whom we greatly respect, said that a great issue of democracy is involved. The hon. Member for Oxford, West and Abingdon (Dr. Harris) talked about something called homophobia. I do not know what on earth it is, but I am sure that there is none of it in Southend. However, it is obviously an issue that some hon. Members think is terribly important.
I do not want to deal with those issues, because we are practical people in Southend. We simply want to know what the effect will be of accepting the view of the other place. The number one question in Southend is, if we do not insist on our amendment, will young men between the ages of 16 and 18, who voluntarily engage in homosexual acts, be prosecuted and perhaps fined or sent to prison? It is a simple question. We have heard some fantastic speeches from hon. Members who feel that great issues are involved, but practical people in Southend want to know the answer to that question. Will we continue to prosecute until new legislation passes into law? Will we continue to fine people or to send them to prison if need be?
Most people would assume that that would be the case, but those who are desperately anxious for a change in law do not seem to be too worried about it. They agree with the Government's decision to put off dealing with the matter until the next Session. Why are they not worried? Will the Home Secretary tell us whether we shall continue to prosecute, fine or send to prison those aged between 16 and 18 who are breaking the law? Will we say to them, "Don't do it—you'll be breaking the law and you could be in terrible trouble"?
My second brief question is based on rumour. Some hon. Members have the advantage of receiving faxes from researchers, from Conservative central office or whatever, but other Back Benchers, such as me, simply hear rumours. My constituents ask me about the rumours. They say, "Teddy, is this actually happening now?" The rumour is that people are not being prosecuted. That may be absolute nonsense and the Home Secretary may be glad to tell me so. However, I have been told that people are not being prosecuted for voluntarily engaging in homosexual acts. If people abuse or attack others, they can still be prosecuted—but they are not being prosecuted for voluntary acts. I said to my constituents, "I'll find out the answer and come back to Southend tonight and tell you."
The Home Secretary has three competent junior Ministers with him who will be able to give him advice. He also has excellent civil servants. My constituents in Southend want to know how many people, over the last six months—no, let us say 12 months, which is quite a long period—have been prosecuted for voluntarily engaging in homosexual acts.
The third question that my constituents have asked me—I hope that the Home Secretary realises that it is terribly important, as he is responsible for the Bill's passage—is what such a provision has to do with the European thing. I asked the Library what it has to do with Europe, and was told, "Teddy, it's nothing to do with the Common Market—nothing at all."
Apparently—I am sure that cleverer hon. Members, especially the Liberal Democrats, will already be aware of it—there are two European Courts. First, we have a thing called the European Court of Justice, which is what is called "the Common Market court". Secondly, we have something called the European Court of Human Rights, which apparently has something to do with the European convention. In the past, if the European Court of Human Rights said something, the British Government could tell it to go and jump. However—as we have a very responsible Government—we normally do not do that. Although we took the view that something to do with security in Northern Ireland was none of the court's business, and told it to go and jump, usually we did not want to do that.
Things have changed. As you will know, Mr. Deputy Speaker, our Home Secretary and other Ministers have very kindly put the European convention on human rights into British law. I do not know whether that is a good thing or a bad thing, as I do not follow such matters, although I should like to know—it is terribly important—whether including it in our law means that we can still disregard the views of the European Court or disregard what is in the convention.
My constituents have basically said to me, "This provision is utterly irrelevant. The MPs are wasting their time". But I suppose that it is not the first time that they have done so. I am sure that you, Mr. Deputy Speaker, have seen hon. Members jumping up and down, shouting about what we can do for the fishing industry, whereas there is absolutely nothing that we can do for it. Hon. Members jump up and down and talk about banning exports of live cattle, whereas we can do nothing about that. I tell my constituents that hon. Members jump up and down and talk about agriculture because there is not much left for us to do, and it is far better to talk about issues that we think require some attention.
The famous Sutherland case was heard, but not completed, in the European Court of Human Rights. I should like to know whether the Home Secretary thinks that Parliament should have the ability, if it so wishes, to establish differing ages of consent. My understanding is that, since we incorporated the European convention into British law, we simply do not have the power to do so, even if we wanted it.
I appreciate that hon. Members feel strongly about the issue. I appreciate that bishops feel strongly, both ways, about it. I appreciate that rabbis feel strongly about it. I heard one rabbi on the radio, and he was getting very agitated indeed about it. I appreciate also that former Prime Ministers get very excited about it. However, I would really


like to know whether what we do will make the slightest bit of difference. I think that, as we have incorporated the convention into British law, there is nothing that we can do about it.
As someone who has been an hon. Member for years and years—hon. Members are probably fed up of hearing me—I think that it is sad and depressing that hon. Members are getting agitated, marching in the street and claiming that they want to do something about an issue, whereas their power has gone and our democracy has essentially been dying.
I therefore hope that the Home Secretary will give me straight and specific answers to three questions: first, will people still be prosecuted; secondly, how many prosecutions have there been in the past year; and, thirdly, do we have the power to establish separate ages of consent for men and women, bearing in mind the fact that the European convention on human rights is now part of British law? If he will answer those questions, I think that my constituents will be reassured. Regardless of whether our freedom and liberty and the nation's moral fibre will be undermined, and regardless of whether homophobia breaks out in constituencies—Liberal Democrat or not—across the country, factual answers to those questions would help greatly.

Mr. Straw: With the leave of the House, I should like to respond to some of the points that have been raised in this cameo debate, as it has become. I should tell my right hon. Friend the Member for Chesterfield (Mr. Benn) that I have rarely been as entertained by a speech as I was by his.
I should reply first to an important point made by my hon. Friend the Member for Linlithgow (Mr. Dalyell), who asked whether the review group that I have established to examine the issue of breach of trust—which was raised first by my hon. Friend the Member for Bassetlaw (Mr. Ashton)—will also be concerned with Scots law.
The answer to my hon. Friend's question is that the Scottish Office will be represented on the group and will take account of its conclusions, as the matter deals with an area of law that will be devolved when the Scottish Parliament comes into being. Meanwhile, it is theoretically open to the Westminster Parliament to legislate on matters relating to Scots criminal law. However, we would do so only on essential issues, and when it is clear that such changes would have the full consent of the Scottish people. We shall consult with our Scottish colleagues in the light of the review. I hope that that satisfactorily reassures my hon. Friend.

Mr. Dalyell: Thank you very much.

Mr. Straw: That is the first time than an hon. Member has intervened in a speech only to thank me and nothing else.
In his very entertaining speech, my right hon. Friend the Member for Chesterfield asked a question that I should perhaps deal with briefly by telling him of a wholly unexpected duty that I assumed when I became Home Secretary—administering the Oath of Homage that full bishops have to make to Her Majesty before taking their see. Although the oath surprised me, it is not an affront to democracy; it is rather a natural consequence of the Anglican Church being the Church by law established. I am not proposing that the Government should introduce a Bill on that matter to be decided on a free vote.
I tell my right hon. Friend the Member for Chesterfield that the oath is not quite as harsh as he described—it is a little more mellow—although it certainly ensures that there is no ambiguity about new bishops of the Church of England recognising Her Majesty and no one else as the head of the Church. I have had some research done on the oath that I am now required to administer to new bishops, and my right hon. Friend may be interested to know that it was drafted—to my surprise—not by Henry VIII, but by Elizabeth I, in the first year of her reign, in 1558.
My right hon. Friend said that democracy is more important than the Bill. I think that it would be a defeat for democracy if we were to lose the Crime and Disorder Bill. At the general election, every Labour Member stood on a manifesto stating that, if we were elected, this Bill implementing 12 manifesto commitments would be implemented as soon as possible. I tell the House, with respect, that the problem about following any advice other than that which I have offered—a reluctant but temporary acceptance of the Lords decision—is that we would not only delay achievement of Royal Assent, but could entirely put at risk the Bill, which would have obvious consequences.
The hon. Member for Oxford, West and Abingdon (Dr. Harris) asked me two questions, the first of which was whether legislation on the age of consent would be separate from any legislation on breach of trust. The answer—which was implicit in the ante-penultimate paragraph, on page 3, of my letter to my hon. Friend the Member for Brentford and Isleworth (Ann Keen)—to that question is that it remains to be seen. We shall await the outcome of the review to determine whether legislation is required and is the most appropriate vehicle for that legislation. This Bill, a separate criminal justice measure or a separate stand-alone Bill could provide that vehicle. We cannot anticipate the most appropriate vehicle, but will have to wait to see the review's results.

Dr. Harris: I realise that the Home Secretary cannot or will not give an undertaking, and I appreciate the reasons for that. However, does he accept the point that I made—that it will create difficulties for some of us if an amendment to equalise the age of consent and provide equal human rights is directly associated in legislation with issues such as child sex abuse or breach of trust?

Mr. Straw: Many Bills deal with diverse subjects.

Sir Norman Fowler: Like this one.

Mr. Straw: Indeed. The public do not necessarily associate one part of a Bill with another, except in the sense that the whole Bill deals with Home Office criminal law matters. As I have made clear today and in my letter to my hon. Friend the Member for Brentford and Isleworth, the review and the legislation
will concern both young men and young women and in a non-discriminatory way.
That is an important assurance.
I understand the point about the sex offenders register. We need to have discussed and resolved that issue before any Bill is brought forward, but it is more complicated than the hon. Gentleman suggests, partly because of the way in which criminal convictions are recorded. I accept the principle of his point, but further consideration is necessary.
6 pm
The hon. Member for Southend, West—or is it Southend, East? I have great affection for both.

Mr. Robathan: Good Tory seats.

Mr. Straw: It does not matter. The Kursaal is the same, whether it is Tory or Labour. I spent many happy days in Southend, usually trying unsuccessfully to impress girl friends.
The hon. Member for Rochford and Southend, East (Sir T. Taylor) asked three questions. First, he wanted to know whether, if we accept my recommendation to comply for the time being with what the Lords have decided, 16 to 18-year-olds may continue to be prosecuted. The answer is yes, they may, because that is the law of the land. As long as the law of the land stands, people are open to be prosecuted. Secondly, he wanted to know whether it was our policy for people not to be prosecuted. The answer is no. Prosecution policy is a matter for the Crown Prosecution Service and the Director of Public Prosecutions, who are, rightly, statutorily independent of Ministers. They are supervised by my right hon. and learned Friend the Attorney-General. In that capacity, Law Officers are also independent of Ministers. That is entirely right.
The hon. Gentleman asked how many people had been prosecuted and convicted in the past year. From the memory of the Minister of State, Home Office, my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael)—I hope that he has got this right and it is as well that the reshuffle has come and gone, if he has not—there were six prosecutions in the past year, of which four led to convictions. That is not particularly surprising given that we are talking about acts of consensual sex. The police cannot prosecute unless someone retrospectively believes that they have been victimised and goes to the police.
The hon. Gentleman's third question was about the difference between European treaties—such as those of Rome, Maastricht and Amsterdam—and the European convention on human rights. I think that the hon. Gentleman knows, but perhaps not so many people in Southend know, that there is a difference. The European convention on human rights was drafted principally by two common lawyers, one of whom was David Maxwell Fyfe, a distinguished Conservative lawyer who later became Lord Chancellor for about eight years. The purpose of the European convention was to write into European law the human rights that we have taken for granted in this country. After several years, we are one of the few countries not to have incorporated it. The relevant Bill is still awaiting Royal Assent and will probably not

receive it until October this year. Had it become law, we might have avoided some of the problems that have arisen with the European Court of Human Rights.

Mr. Bercow: The Home Secretary has just helpfully told us, from the recollection of the Minister of State, the number of people who have been prosecuted for consensual homosexual activity. May I stretch him a little further and ask how many people were arrested for engaging in consensual homosexual relations, but released without charge?

Mr. Straw: I cannot tell the hon. Gentleman that off hand, but I shall be happy to write to him. If he wants to table a question, I think that there is still time for it to be answered before we rise for the recess.

Dr. Harris: There are still two questions that the Home Secretary has not answered. Perhaps he will just note that he has not answered them and promise to write to me. First, at what level will decisions to prosecute in the interim be made in the Crown Prosecution Service? I accept that that is not his departmental responsibility, but I should be interested to know what he thinks. Secondly, how does the matter relate to the review and possible legislation on other discriminatory matters on sexual offences? The existence of such issues and the possible need of remedy were acknowledged by the Minister of State on 22 June.

Mr. Straw: I have laboured the point about the independence of the prosecutors. I cannot intervene on that. The law is there. The duty of prosecutors is to make their decisions in the light of the evidence presented to them and the code of the Crown Prosecution Service. On the second point, the review will deal with the issue of breach of trust first raised by my hon. Friend the Member for Bassetlaw. There are always arguments about whether the law should be changed in other respects. There may be a wider review of sexual offences.

Mrs. Lait: I hope that the Home Secretary will confirm that his officials will be willing to talk to people from the national missing persons helpline on the issue that I raised.

Mr. Straw: I shall be happy to arrange that. If any hon. Member from either side wants to make representations, I shall be pleased to receive them and to make arrangements for groups of Members to talk to officials involved in the review group, if that would be convenient.
The defeat by the Lords has placed the House in great difficulty. It caused great anger and concern and great upset to my hon. Friend the Member for Brentford and Isleworth and other hon. Friends, as well as the hon. Members for Epping Forest (Mrs. Laing), for Witney (Mr. Woodward) and for Oxford, West and Abingdon, who so courageously and vocally supported her. Speaking personally, not for the Government, I should like to place on record my great admiration for my hon. Friend and her colleagues. I am very grateful to them for their response to my representations over the weekend. My recommendation is the best way forward, preserving the Bill and ensuring that


it receives Royal Assent by the end of the week. The Government are committed to introducing legislation in the next Session to ensure that the House is able to take a conclusive view on the age of consent.

Question put and agreed to.

Resolved,
That this House doth not insist upon its amendment.

Subsequent Commons amendments not insisted upon.

ROYAL ASSENT

Mr. Deputy Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:
Landmines Act 1998
Private Hire Vehicles (London) Act 1998
Northern Ireland (Sentences) Act 1998
City of Edinburgh (Guided Busways) Act 1998
Tamar Bridge Act 1998.

Orders of the Day — National Minimum Wage Bill

Lords amendments considered.

New clause

Lords amendment: No. 1, after clause 1, to insert the following new clause—

EXCLUSIONS

(". —(1) If it appears expedient to the Secretary of State, he may, by order made by statutory instrument, provide for the total or partial exemption from the provisions of this Act of— 

 (a) any area, sector of employment, trade or industry; 
 (b) undertakings of different sizes; 
 (c) persons of different ages; or
 (d) occupations or categories of persons. 

(2) The power conferred by subsection (1) includes power to make such incidental, supplemental or transitional provision as appears to the Secretary of State to be appropriate. 
(3) The power of the Secretary of State to make an order under this section includes the power to vary or revoke its provisions or to limit its operation for a specified period of time by means of a further such order.")

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney: I beg to move, That this House does disagree with the Lords in the said amendment.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss Lords amendments Nos. 5 to 7.

Mr. McCartney: We have no hesitation in asking the House to resist the new clause introduced in another place—but, before doing so, I pay tribute to my noble Friends Lord Clinton-Davis, Lord Falconer and Lord Haskel, who dealt with the Bill in a professional and effective way in that place.
For the life of me, I cannot understand or accept the sight of hereditary peers—the descendants of robber barons and cattle thieves—trying to deny people the national minimum wage. It is even more undignified when the Tories and their Whips arrange for people to come to the House of Lords, probably for the first and only time this year—some did not even turn their engines off while they went to vote before leaving the House again—for one simple reason: to pass a wrecking amendment to try to damage fatally the introduction of the national minimum wage for 2 million of the most vulnerable and lowest-paid workers in Britain. The issue was further complicated by the Liberal Democrats, who should be ashamed of themselves for siding with sweatshop owners and backstreet exploiters.
Let us look at what happened in the House of Lords. We expected the Conservatives to try everything in a last-ditch attempt to get rid of the national minimum wage, and the Government were defeated by 58 votes. Of the 161 peers who voted for the new clause, 84 were hereditary—67 Conservatives, eight Liberal Democrats, eight Cross Benchers and one other. Counting the votes of life peers alone, the Government would have won the vote by 88 to 77—a majority of 11.
Some of those who voted against the Government were among the largest landlords and the wealthiest people in Britain. They came in to deny groups of workers the opportunity to have a national minimum wage from 1 April next year.

Mr. Tim Boswell: Will the Minister not concede that, whatever took place in their lordships' House with hereditary peers, the amendments now under discussion would not require any derogation from the national minimum wage? They would merely provide the Secretary of State—who is now sitting at his left hand; we are pleased to see him in his place—the power to derogate if he considered it desirable.

Mr. McCartney: The hon. Gentleman talks nonsense; he talks out of the side of his mouth. The amendments would allow a future Conservative Secretary of State—if such a thing ever befell the nation, which I doubt—to exclude areas such as Cumbria, the north-west, the north-east, Scotland or Wales. He or she could also exclude sectors, so all the hairdressers in Britain—the lowest-paid workers in the land—could be excluded from the minimum wage.
A Secretary of State could also exclude firms of different sizes, so all the hairdressers in small companies could be excluded. When we read the amendments in the context of what I am saying, we see that the proposals are designed to wreck the possibility of millions of workers in Britain benefiting from the national minimum wage. For the sake of expediency, at the whim of a Secretary of State and without further reference to Parliament, whole areas of the country could be excluded from receiving the minimum wage.
The clause does not improve the Bill. It does not make it operate better. It will not help a single worker to benefit. The amendments serve only to illustrate the lengths to which the Opposition party—indeed, in the House of Lords, the two Opposition parties—will go to undermine the principle of the introduction of the minimum wage.

Mr. John Redwood: Will the Minister explain why the Minister of State, Lord Simon, did not attend to vote on that occasion? Does that not give the lie to his idea that all the problems arose from Conservative hereditary peers? Surely Ministers in the Department of Trade and Industry could have offered some support.

Mr. McCartney: Surely the right hon. Gentleman can come up with something better than that. My noble Friend Lord Simon, like all Ministers in the Department, goes out and does work on behalf of the Government, and that is what he was doing—unlike the right hon. Member for Wokingham (Mr. Redwood), who, when he was a Minister at the DTI, spent his time trying to close down British industry. Our job—that of my fellow Ministers, including my right hon. Friend the new Secretary of

State—is to rebuild industry and refashion it out of the shambles that the right hon. Gentleman left us after the election.

Mr. Redwood: Can the Minister explain why that vote was treated as so unimportant that the Minister of State did not need to attend to ensure that the Government won it?

Mr. McCartney: Wriggle as the right hon. Gentleman might, the truth is that the Conservatives brought people to the House of Lords in their Ferraris, their Mercedes, or whatever other transport they may have had, to wreck a Government Bill for which we have a national mandate and which the whole of Britain, including two thirds of Conservative voters, supports. The right hon. Gentleman must live with the consequences of the Lords action of inserting into the Bill a new clause that undermines the whole concept of a national minimum wage.

Mr. David Winnick: Why should we complain about Conservative opposition to a national minimum wage? Should we not welcome it, at least from the party point of view, and wrap it around the Tories' necks at the next election?

6.15

Mr. McCartney: I am happy to wrap things around the necks of the Tories between now and the next election. Why miss the opportunity?
The point was made during a recent debate when the right hon. Member for Wokingham and I had a short intercourse on issues relating to—

Mr. John Bercow: I think that the Minister means "a short exchange of views".

Mr. McCartney: No, I choose my words carefully.
That evening, the right hon. Gentleman made a fundamental comment about how the Conservatives, in this Parliament and in the run-up to the next election, will deal with the new employment rights that the Government provide for vulnerable people in Britain. He made it clear that he will go into the next election on a policy of the abolition of the national minimum wage. What he is offering millions of people in Britain is, "Vote Conservative and take a wage cut."
The right hon. Gentleman also said that he would review all the other minimum standards and new employment rights that the Government are introducing—with the support, I may add, of large parts of British industry, sick and tired of the Tories' low-pay, low-investment economy, and looking to an ultra-modern economy with good standards of pay, good conditions and investment in the workers, in employment rights and in standards of skill.
In that debate, the right hon. Gentleman had the opportunity to show once and for all that the Conservatives accept the fact that the British people overwhelmingly want good minimum standards in the workplace, and do not expect Her Majesty's Opposition to threaten them with withdrawal of those rights, especially when some of them will have a significant pay


increase under the national minimum wage, because they are now being paid as little as £1.20, £1.30 or £1.40 an hour.
For the right hon. Gentleman—who, for a part-time, two-days-a-week job receives £12,000 a year—to stand at the Dispatch Box and try to deny the minimum wage to low-paid workers is nothing short of a personal scandal. Under no circumstances can he wriggle out of the decision taken in another place—a decision clearly calculated to assist his campaign to ensure that the national minimum wage is not implemented by 1 April next year.
We have no hesitation in opposing the new clause and the other amendments. We were elected to introduce a national minimum wage, and that is what we shall do. We made the Government's position clear in earlier debates, and I shall not weaken now, at the final hurdle. The new clause would provide the Secretary of State with wide-ranging powers to make exemptions whenever he or she felt it expedient. That approach challenges the fundamentals of the policy behind the Bill.
The House will appreciate that the Bill has been designed in a way that rules out the possibility of exemptions according to sector, region, size of firm or occupation. It permits, in specific circumstances, exemptions or modifications according to age. We received recommendations on that from the Low Pay Commission, which we accepted and which we shall implement.
The new clause proposes something completely different from the limited range of exemptions or modifications in clauses 3 and 4, and opposing it presents me with the opportunity to reiterate the Government's commitment to a single national minimum wage that will be universal in its application.
Our approach is diametrically opposed to the direction suggested in the amendment. We want an inclusive policy; we do not want to exclude whole swathes of people. The idea is to provide a floor across the board so that we can get rid of poverty pay. We also want to provide a level playing field, so that companies can compete fairly on the basis of quality, not on the basis of excessively low wages.
Hon. Members know what our inheritance was after the general election. Whether in the regions of England, in Scotland, in Wales or in Northern Ireland, people suffered as a result of endemic low pay—2 million people earned £2.50 an hour or less. Some people, having worked full time for a week, had to suffer the indignity of having to claim additional benefits simply to live or to make ends meet.

Mr. Jim Cunningham: Is my hon. Friend aware that when, two years ago, one of my constituents raised the issue of his pay—which was £1 an hour—he was told to apply for family supplement?

Mr. McCartney: We know that the Conservative Government encouraged such Arthur Daley employers. We remember the advertisements, such as the one for a night shift security guard job, offering 50p an hour and saying: "Bring your own dog and uniform." That was the reality of Britain under the Tories. They made this country the sweatshop capital of Europe, and they were proud of it. They boasted about it across the world, saying: "Come to Britain and pay your workers £1.20 or £1.30 an hour."

Thank goodness inward investors came to Britain for different reasons; they pay their employees good wages and provide good working conditions.
We do not want to go back to the Tory years, in which there was a downward spiral of wages. The Tory policy was not to create an economy of high-quality goods and services, in which people's employability is based on the quality of their training and knowledge. The Tories undermined good companies and good company practice; they made companies compete against one another on the basis of a free-for-all downwards wages spiral.
Tory Ministers at the Department for Education and Employment defended the advertisement of jobs at as little as £1 an hour. The Tory Government, of which the right hon. Member for Wokingham was a member, took away the last vestiges of protection for home workers. The Department of Trade and Industry received evidence that women working for home working organisations were earning as little as 38p an hour. That was not in 1888; it was in the last year of the Tory Government. That is the legacy that the Tory party left this Government to clear up, and we have no intention of allowing the new clause to damage our capacity to do so.
The limitations in clauses 3 and 4—which the new clause would remove—are necessary. They defend the integrity of the national minimum wage. Despite the widespread acceptance of, and support for, our policy from business and from the electorate as a whole, and despite the broad acceptance of the Low Pay Commission's recommendations, I regret to say that the policy still seems to need defending against Conservative Members, who are hanging on to the idea that we in Britain can somehow succeed by paying people as little as 38p an hour. What an outlook for Britain in the new millennium! It beggars belief that the right hon. Member for Wokingham and his colleagues actually ran the economy.
The nightmare years are ended—we shall introduce the national minimum wage, and we shall do so on 1 April next year, as we said we would. We have made it clear several times that variations of rate by sector, region, size of firm or occupation would be unfair and unworkable. The same applies even more strongly to exemptions on those grounds, which is what the new clause would provide a power to make.
There is no doubt about the inevitable unfairness and inequity of the new clause. It is deliberately designed to remove from the Bill's protection the very people whom the minimum wage would most help. The Opposition should be ashamed of themselves, as everybody else is ashamed of them.
The whole purpose of the Bill is to introduce, for the first time in this country, a national minimum wage that is truly national and that will make a difference to the many workers who strive to exist on poverty pay. It marks an historic step to bring rights to British workers that many of their counterparts in other countries have enjoyed for decades.
The Bill's fundamental approach is inclusive, but the new clause attacks head-on that approach and the Government's philosophy, which the electorate fully supported. I urge the House to save the Bill, and to reject the amendments.

Mr. Redwood: I urge the House to keep the very sensible amendments that were made in the other place.


Once again, the Minister has been extremely disappointing. He has not listened to any of our arguments in the House or in Committee. He dramatically misrepresents the Conservative position. I have never said that we shall abolish the minimum wage; I have said that we shall review the whole raft of regulations and legislation that we inherit, and then decide what needs changing to create more jobs and more prosperity in our country.
I have never said that we want low pay. We want people to be well paid and to have a good standard of living. It is most important, however, that people are not moved from low pay to no pay—that is the main point that we have urged on the House. The new Secretary of State for Trade and Industry, the hon. Member for Hartlepool (Mr. Mandelson), is well aware of that point.

Mr. Alasdair Morgan: The right hon. Gentleman says that he has not stated categorically that a future Conservative Government will abolish the minimum wage. Will he give a guarantee that they will not abolish it?

Mr. Redwood: Of course not. We shall review it, to establish what is best for the country.
The minimum wage will do most damage on its introduction. That is why we have opposed it. On its introduction, bad employers may decide to sack people rather than to pay them extra. I do not think that the Minister will enjoy meeting people across the country who have lost low-paid jobs as a result of the Bill. Moreover, there may be a wages explosion when the Bill is implemented, as better-paid people will demand large increases to maintain differentials. The Chancellor of the Exchequer warns about job losses arising from wage inflation, yet the Minister is introducing legislation that will trigger it.

Mr. Ian McCartney: The right hon. Gentleman knows that the Government have taken account of economic circumstances, and are introducing the minimum wage sensibly. That is why the overwhelming majority of employers and those involved in British industry support the concept of a minimum wage.
Perhaps the right hon. Gentleman will explain an historical point. Is it not the case that, after the Conservative Government abolished the wages councils, removing basic employment rights that ensured minimal standards and a minimal floor in the labour market, unemployment rose to 3 million?

Mr. Redwood: That is not cause and effect. The Minister's attempt to make an historical point has misfired. Unemployment rose to too high a level at one point under the Conservative Administrations because we adopted the exchange rate mechanism policy that was strongly recommended by the Labour party, even though it was a mistake. The Minister and I have often debated that point, and I think that I should be straying out of order if I went further into the matter.
We are not urging lower standards. We want better pay and better standards of living. The debate is about how that can be achieved. We believe that it can be achieved

by more flexible markets, not by more Government. We are certainly not out to deny workers fair pay; we want them to keep their jobs.
In a previous debate, the Minister grotesquely misrepresented my personal financial affairs. I notified him of that privately, in the hope that he would have the decency to correct the record. I live in hope that he will, as it does not do justice to debates in the House to mislead people in such a way.
I am grateful that the hon. Member for Hartlepool is in the Chamber to hear this debate, although I should have liked to hear him, rather than the Minister, move the motion. I offer my hearty congratulations on his appointments to the Privy Council and as Secretary of State for Trade and Industry. His arrival at the Department will be welcomed by many, as many people felt that the outgoing President of the Board of Trade—as the job was known—let down British business in a big way, and came forward with a large number of bad proposals, including the proposal for a national minimum wage. Business is desperately in need of a change of policy.
I had hoped that the new Secretary of State, who arrives at his Department well briefed on the minimum wage because of his active participation in policy discussions in his previous job, would tell us that he welcomed the Lords amendments, which, as we know from leaked correspondence and from his confessions to The Guardian, are precisely the type of amendment for which he argued when he was Minister without Portfolio. I imagine him arriving at the Department of Trade and Industry, elated at achieving his life's ambition of joining the Cabinet, clutching his model of the dome—where the Secretary of State goes, the dome goes too—but nervously asking why the previous incumbent had had such a short stay.
We have all read in today's newspapers authoritative briefings saying that the Secretary of State has arrived to win back the business support lost by the previous incumbent. In particular, the trade union and minimum wage reforms proposed by the outgoing President of the Board of Trade must be modified, said the briefings, in order to win back business support.
6.30 pm
Why is the Secretary of State not standing before us to offer proposals that would modify the impact of a Bill that many in the business community think will do more harm than good? Why has he not come to welcome Lords amendments that would give him the very flexibility in his new role that he formerly sought for someone else in all his interesting correspondence?
The House may wish to be reminded of what the hon. Gentleman said when he debated these matters from his previous vantage point. In his letter to The Guardian, which explained leaked Government correspondence, he stated:
The point I raised in correspondence on this issue with colleagues was a practical one, as to whether the draft Bill as worded allowed ministers sufficient flexibility to refine policy in the light of experience with the actual functioning of the National Minimum Wage.
I open my dealings with the new Secretary of State in precise agreement with him. I find myself urging the very case that he urged when he was Minister without Portfolio.
The Secretary of State's letter went on to imply that flexibility was necessary in case jobs were lost. He said that he wanted a lower rate of pay for young people—in those days that meant everyone under 25, although the age has come down to 18 in subsequent discussions. As Minister without Portfolio, the hon. Gentleman saw the point that young people, those without skills and those who needed further training, might be thrown out of their jobs if the minimum wage were introduced in the wrong way. He felt that it would be better to allow flexibility so that they could get a decent start on the ladder of opportunity and employment, and, if necessary, top up their inadequate remuneration with benefits.
I have often debated that point with the Minister of State, who attacked the previous Conservative Government for saying that low pay should be topped up with benefits. We felt that policy only reasonable, because some rates of pay could not sustain decent family life. Now we discover that the Government have invented a far bigger and more expensive system for doing exactly the same thing—the working families tax credit. On the Minister's own admission, he and the Government propose to subsidise what he calls poverty pay.

Mr. Ian McCartney: Let us get one thing straight. The previous Government proposed benefits instead of pay. We propose a package of measures that make work affordable. There is an important difference. The previous Government drove down pay, first by eliminating people's entitlement not to be paid below a certain rate through their abolition of the wages councils, and, secondly, by manipulating the benefits system and allowing high levels of unemployment. They drove people to take wages lower than £1 an hour in many cases.
That is the legacy that we have had to deal with, and that is why we have introduced a range of measures to make work affordable. The difference between us and the Conservatives is that we want a minimum wage to be part of the package, while the right hon. Gentleman wants no level to be set, and would use the benefits system to subsidise poor-paying employers.

Mr. Redwood: The Minister can rant all he likes, but this Government, like the previous one, admit that there will be people whose pay is not adequate for their family circumstances. We can see from the Chancellor's forecasts that they admit that, even after the minimum wage has come in, large sums will have to be paid as tax forgone or as actual benefits, or as a combination of the two, to top up wages.
The Minister protests too much. There is not as much difference between Conservative policy and Government policy as he pretends. Both major parties know that, in a free-enterprise market, not everyone will get adequate remuneration for their family circumstances for all their working lives. It is a duty of a civilised society that taxpayers should top up or contribute to incomes in those circumstances.
The row tonight is about whether the Minister of State and his new-found hon. Friend the Secretary of State are taking too many risks with too many jobs. We submit that, without the Lords amendments, the risk is too great. The Minister would lose nothing by accepting the amendments. The Secretary of State would be given the power to make a judgment. If he judged in future that

my right hon. and hon. Friends and I were wrong, and that no jobs had been lost, he would not need to make a move. If we were right, however, and the amendment was included in the Bill, it would be easier for him to make the changes necessary to avoid the loss of so many jobs.

Mr. Bercow: My right hon. Friend has helpfully reminded the House of earlier contributions to the minimum wage debate by the Secretary of State in his previous capacity as Minister without Portfolio. Does my right hon. Friend agree that if the Secretary of State has a shred of self-respect, he will speak at the Dispatch Box before the debate ends to explain whether he now believes that there is no justification for exemption from or variation in the rate of the minimum wage by age, sector, region or size of undertaking. What has caused the hon. Gentleman suddenly and spectacularly to change his mind? Why has he not felt it necessary to explain his thinking to us?

Mr. Redwood: It is quite extraordinary that the Secretary of State has not done so. It is even more extraordinary in the light of spinning in the press to the effect that the new Secretary of State will be business-friendly in a way in which the outgoing President of the Board of Trade is admitted not to have been.
I trust that the hon. Gentleman did his own spinning. We have not been told whether he remains spin doctor extraordinaire as well as Secretary of State, or whether he will have to rely on others to do his spinning. Whoever did it today, the intention was clear. Downing street has not denied that the Secretary of State is appointed to go to war with his Minister of State, and to overrule him. He is appointed to put a little common sense into the minimum wage and into trade union reforms.
The Secretary of State sits there, looking as if he has not a care in the world, grinning benignly, but quite unable to intervene decisively at the very moment at which he has his last chance to improve the Bill to give him the flexibility that the spin doctors tell us he will need and will achieve. Does he really think it amusing that many people may lose their jobs as a result of the policy that he and his hon. Friends intend to rubber-stamp through the House? Has he thought at all about the wise words—on this occasion—of the Chancellor about wages? The Chancellor has spelt it out to all and sundry that, if wages go up too much over the next two or three years, jobs will be lost.
For once, I agree with the Chancellor, and I suggest that the Secretary of State might do so, too—a rare event. If the Chancellor is right, what action will the Secretary of State and his colleagues take to make sure that people do not put in a large number of differential pay award requests for those on earnings much higher than the minimum wage? How will he sort out the mess that Labour policies are already creating? There is a huge gap between the rate of increase in private sector earnings—up 16.4 per cent. since 1995, and accelerating under the Labour Government—and public sector earnings that have gone up by only 8.5 per cent. in the same time. The gap is growing wider under the Labour Government.
Does the Secretary of State accept that the point will soon come at which public services are short of labour in many parts of the country because wages have fallen too


far behind? Will not the minimum wage help to trigger a whole series of differential, catch-up and comparability pay increases as it unravels before us? That will undoubtedly destroy jobs. The golden economic legacy of the previous Government will be frittered away on higher wage inflation, and the minimum wage will partly be the reason.
I therefore urge the new Secretary of State to agree with the Chancellor on this matter, to disagree with the rest of the right hon. Gentleman's economic strategy in the name of standing up for manufacturing and business, which are being throttled and killed by the current economic policy mix, and to come to the Dispatch Box before this short debate concludes and say that he still believes what he claimed to believe when he was Minister without Portfolio. I also urge him to be grateful to the Conservative Opposition in another place—for thinking of him and helping him out of the his difficulty by offering him greater flexibility—and to overrule his Minister of State before No. 10 tells him to do just that.

Mr. David Chidgey: The Minister of State's remarks—I should use a stronger word to describe them—had a touch of "holier than thou" about them as he set out what he considered to be the arguments advanced by the Liberal Democrats. We debated the issues long and hard in Committee and on Second and Third Reading, and while it may be a habit of politicians to rewrite history, it is surprising to find it being rewritten quite so soon. The record clearly shows the arguments that we put forward at great length and with great thoroughness to demonstrate our concern at some aspects of this legislation.
The Minister well knows that we have never disagreed in this place about the principle of a national minimum wage. Our argument has concerned how and where it should apply.

Mr. Ian McCartney: I think that the hon. Gentleman believes in a national minimum age, but does he not accept that it was a gross error of judgment to support a Conservative amendment that would wreck the whole concept? It is one thing to say that one proposes regionalisation and another to put one's name to an amendment that would prevent millions of low-paid workers from getting the wage.

Mr. Chidgey: I thank the Minister for that intervention, as it brings me to my next point. Throughout many weeks of debate in this place and the long, or extended, Committee stage—which, on occasion, ran through the night to the next lunchtime—the Government, who claim to have consulted and to consult all and sundry, have refused to listen to any of our arguments. I think that I am right in saying that, throughout those deliberations, the Government accepted only one amendment.
Is it surprising, then, that, when our arguments for flexibility and variation were totally ignored, they should have been put forward again in their lordships' House to give the Government one last chance to rethink their views? I can understand the frustration that was felt in the other place, which led it to make us deal with those issues again.
One aspect that is so frustrating is that, although the Government claimed to be consulting by setting up the Low Pay Commission, they failed to take on board its full recommendations when it reported. The Government cherry-picked what proposals to accept. As the Minister knows, I asked him time and again, in questions in the House and in interventions, whether the commission would be a fully independent, permanent body, able to monitor and implement recommendations, but he never answered me directly. I am therefore not at all surprised at the frustration that has been felt in Parliament as a whole.
I was glad to see the Secretary of State on the Front Bench. Sadly, he has left us already—perhaps he has already found the task a little too demanding—but nevertheless, he will know, I trust, having done his research and read the reports of our debates on the minimum wage in the months that have gone by, that the Liberal Democrats have long argued for variations and flexibility in the introduction of a national minimum wage. He also knows that we are extremely concerned about low pay, as he is, but we are also concerned about employment. Those arguments are on the record—one does not have to rewrite history, as they are there and they are clear. Our arguments have not been confounded by the Government.
To summarise, we have long argued that the Low Pay Commission should have the freedom to examine the issues. It should be a permanent body, and the Government of the day should listen to it and accept what it says. That is the true measure of consultation and of understanding the concerns of those who seek and deserve decent wages and those who employ them. I shall continue to press the Government to recognise those points and allow us to ensure that the secondary legislation that follows the Bill, which will presumably become an Act, starts to listen to the people who matter.

Mr. Alasdair Morgan: I shall be brief, and I am sorry to take some of the Minister's time for his reply.
Tonight we have simply heard a reiteration of what we heard every day in Committee and on Second and Third Reading. The arguments have not changed—we have merely had Conservative attempts to undermine the fabric and principle of the Bill. We did not get much in the way of argument tonight—at least in Committee, we had arguments ad nauseam. Today, we merely had the bald statement that the minimum wage would cause unemployment, and the Conservatives certainly know all about how to do that.
The arguments that we are meant to accept would drive a coach and horses through the Bill. They would allow a future Conservative Administration—should this country ever be unfortunate enough to suffer again from that—to destroy the Bill piece by piece in every profession and every part of the country.

Mr. Redwood: Is the hon. Gentleman saying that he disagrees with the Chancellor of the Exchequer when he says that higher wages mean fewer jobs?

Mr. Morgan: I disagree with the Chancellor about many things, as the right hon. Member for Wokingham (Mr. Redwood) will not be surprised to learn. I certainly concur with the proponents of this Bill that the way to


create employment is not by running a sweatshop economy. Low wages do not create jobs; they mean that we will end up with the sort of economy that we should not be seeking.
The Government's case would have been even stronger had they grasped the nettle and allied any reduced or second rate for young people to training, instead of the compromise that they produced after the Committee stage. That apart, we must reject the Lords amendments. This Session, many unfortunate amendments have been agreed in the Lords, and these, like most of them, should be consigned to the dustbin.

Mr. Ian McCartney: The hon. Member for Eastleigh (Mr. Chidgey), speaking for the Liberal party—

Mr. Chidgey: The Liberal Democrats.

Mr. McCartney: Yes, I do realise that there is a difference, on occasions. The hon. Gentleman cannot get away with arguing, as he has done—he has been defeated intellectually and on economic grounds on each occasion—that certain people should get less than others in another region. He did not set out in any detail why a hairdresser five miles inside one region should be paid less than another hairdresser five miles down the road in another region.
Secondly, the hon. Gentleman gave no indication of what regionalisation would mean for the benefit system and for those in the regions. It is one thing to table an amendment to put one's case, but it is another to sign up to some of the biggest landowners in Britain and their allies, who come to the House of Lords with no mandate and vote to smash this Bill. The hon. Gentleman cannot have it both ways. He has a responsibility to low-paid workers, and his party failed that test in the House of Lords. Tonight, he has a chance to apologise and to reverse that decision, by joining the Government.

Mr. Chidgey: I am grateful to the Minister for giving way, as I know he wants to proceed, but I must remind him that, in Committee, I gave some convincing evidence of the differing costs of employment in different parts of the country. As he knows—it is on the record—independent research has shown the different costs to businesses and small firms of different levels of pay. The argument is sound, and the evidence is there.

Mr. McCartney: The hon. Gentleman tries hard, but his proposals are flawed. Since the publication of the report by the Low Pay Commission, business after business and company after company have supported the recommendations that it put forward and the Government have accepted. Those organisations and companies range from the CBI to convenience stores and those in the hospitality sector. Across the economy, employers in low-paying sectors support the Low Pay Commission's proposals and want to ensure that they are implemented effectively and fairly.
Once again, the right hon. Member for Wokingham (Mr. Redwood) has shown his true colours. He could not bring himself, even once, to be on the side of low-paid workers. He has pontificated since the election. The debate reveals one simple fact—the Tories have learnt nothing from their defeat and nothing about why they

were defeated. One reason why people voted them out is that they are the party of the few, and do not give a damn or a whit about the life style of millions of low-paid workers. Thank goodness the right hon. Gentleman is on the Opposition Benches and we are on the Government Benches, because the Government's motion to disagree with the Lords amendment means that low-paid workers will at last get justice.

Question put, That this House does disagree with the Lords in the said amendment:—

The House divided: Ayes 308, Noes 121.

Division No. 349]
[6.50 pm


AYES


Abbott, Ms Diane
Clarke, Tony (Northampton S)


Adams, Mrs Irene (Paisley N)
Clelland, David


Ainger, Nick
Coaker, Vernon


Alexander, Douglas
Coffey, Ms Ann


Allen, Graham
Cohen, Harry


Anderson, Donald (Swansea E)
Colman, Tony


Anderson, Janet (Rossendale)
Connarty, Michael


Armstrong, Ms Hilary
Cook, Frank (Stockton N)


Ashton, Joe
Cooper, Yvette


Atherton, Ms Candy
Corbett, Robin


Atkins, Charlotte
Corbyn, Jeremy


Banks, Tony
Corston, Ms Jean


Barron, Kevin
Cousins, Jim


Battle, John
Cox, Tom


Bayley, Hugh
Crausby, David


Beard, Nigel
Cryer, Mrs Ann (Keighley)


Beckett, Rt Hon Mrs Margaret
Cryer, John (Homchurch)


Begg, Miss Anne
Cummings, John


Beggs, Roy
Cunliffe, Lawrence


Bell, Stuart (Middlesbrough)
Cunningham, Jim (Cov'try S)


Bennett, Andrew F
Dalyell, Tam


Benton, Joe
Darvill, Keith


Bermingham, Gerald
Davey, Valerie (Bristol W)


Berry, Roger
Davies, Rt Hon Denzil (Llanelli)


Best, Harold
Davies, Geraint (Croydon C)


Blackman, Liz
Davies, Rt Hon Ron (Caerphilly)


Blears, Ms Hazel
Dean, Mrs Janet


Blizzard, Bob
Denham, John


Boateng, Paul
Dewar, Rt Hon Donald


Borrow, David
Dobbin, Jim


Bradley, Keith (Wrthington)
Donaldson, Jeffrey


Bradley, Peter (The Wrekin)
Doran, Frank


Bradshaw, Ben
Dowd, Jim


Brinton, Mrs Helen
Drew, David


Brown, Rt Hon Nick (Newcastle E)
Eagle, Angela (Wallasey)


Brown, Russell (Dumfries)
Eagle, Maria (L'pool Garston)


Browne, Desmond
Ellman, Mrs Louise


Burden, Richard
Ennis, Jeff


Burgon, Cohn
Ewing, Mrs Margaret


Butler, Mrs Christine
Fitzpatrick, Jim


Byers, Stephen
Flynn, Paul


Caborn, Richard
Follett, Barbara


Campbell, Alan (Tynemouth)
Foster, Rt Hon Derek


Campbell, Mrs Anne (C'bridge)
Foster, Michael Jabez (Hastings)


Campbell, Ronnie (Blyth V)
Foster, Michael J (Worcester)


Canavan, Dennis
Foulkes, George


Cann, Jamie
Fyfe, Maria


Casale, Roger
Galbraith, Sam


Caton, Martin
Gapes, Mike


Cawsey, Ian
Gerrard, Neil


Chapman, Ben (Wirral S)
Gibson, Dr Ian


Chaytor, David
Gilroy, Mrs Linda


Chisholm, Malcolm
Godman, Dr Norman A


Clapham, Michael
Godsiff, Roger


Clark, Dr Lynda
Goggins, Paul


(Edinburgh Pentlands)
Griffiths, Jane (Reading E)


Clark, Paul (Gillingham)
Griffiths, Nigel (Edinburgh S)


Clarke, Charles (Norwich S)
Griffiths, Win (Bridgend)


Clarke, Rt Hon Tom (Coatbridge)
Grocott, Bruce






Grogan, John
Mandelson, Peter


Hain, Peter
Marsden, Gordon (Blackpool S)


Hall, Mike (Weaver Vale)
Marsden, Paul (Shrewsbury)


Hall, Patrick (Bedford)
Marshall, David (Shettleston)


Hanson, David
Marshall, Jim (Leicester S)


Heal, Mrs Sylvia
Marshall-Andrews, Robert


Healey, John
Martlew, Eric


Henderson, Doug (Newcastle N)
Meale, Alan


Henderson, Ivan (Harwich)
Merron, Gillian


Hepburn, Stephen
Michael, Alun


Heppell, John
Michie, Bill (Shefld Heeley)


Hewitt, Ms Patricia
Milburn, Alan


Hill, Keith
Miller, Andrew


Hinchliffe, David
Mitchell, Austin


Hodge, Ms Margaret
Moffatt, Laura


Hoey, Kate
Moonie, Dr Lewis


Hood, Jimmy
Moran, Ms Margaret


Hoon, Geoffrey
Morgan, Alasdair (Galloway)


Hope, Phil
Morgan, Ms Julie (Cardiff N)


Hopkins, Kelvin
Morgan, Rhodri (Cardiff W)


Howarth, Alan (Newport E)
Morley, Elliot


Howarth, George (Knowsley N)
Mudie, George


Howells, Dr Kim
Mullin, Chris


Hoyle, Lindsay
Murphy, Denis (Wansbeck)


Hughes, Ms Beverley (Stretlord)
Murphy, Jim (Eastwood)


Hughes, Kevin (Doncaster N)
Naysmith, Dr Doug


Humble, Mrs Joan
Norris, Dan


Hurst, Alan
O'Brien, Bill (Normanton)


Hutton, John
O'Brien, Mike (N Warks)


Iddon, Dr Brian
Olner, Bill


Illsley, Eric
Pearson, Ian


Ingram, Adam
Pendry, Tom


Jackson, Ms Glenda (Hampstead)
Perham, Ms Linda


Jamieson, David
Pike, Peter L


Jenkins, Brian
Plaskitt, James


Jones, Barry (Alyn & Deeside)
Pollard, Kerry


Jones, Helen (Warrington N)
Pope, Greg


Jones, Ms Jenny
Powell, Sir Raymond


(Wolverh'ton SW)
Prentice, Ms Bridget (Lewisham E)


Jones, Jon Owen (Cardiff C)
Prentice, Gordon (Pendle)


Jones, Dr Lynne (Selly Oak)
Prescott, Rt Hon John


Jones, Martyn (Clwyd S)
Prosser, Gwyn


Jowell, Ms Tessa
Purchase, Ken


Keen, Ann (Brentford & Isleworth)
Quin, Ms Joyce


Kemp, Fraser
Radice, Giles


Kennedy, Jane (Wavertree)
Raynsford, Nick


Kidney, David
Reed, Andrew (Loughborough)


Kilfoyle, Peter
Reid, Dr John (Hamilton N)


King, Andy (Rugby & Kenilworth)
Robertson, Rt Hon George


Kumar, Dr Ashok
(Hamilton S)


Ladyman, Dr Stephen
Robinson, Geoffrey (Cov'try NW)


Laxton, Bob
Rogers, Allan


Leslie, Christopher
Rooker, Jeff


Levitt, Tom
Rooney, Terry


Lewis, Terry (Worsley)
Ross, Ernie (Dundee W)


Liddell, Mrs Helen
Rowlands, Ted


Lloyd, Tony (Manchester C)
Roy, Frank


Love, Andrew
Ruane, Chris


McAllion, John
Russell, Ms Christine (Chester)


McAvoy, Thomas
Salter, Martin


McCabe, Steve
Sarwar, Mohammad


McCafferty, Ms Chris
Savidge, Malcolm


McCartney, Ian (Makerfield)
Sawford, Phil


McDonagh, Siobhain
Sedgemore, Brian


Macdonald, Calum
Shaw, Jonathan


McFall, John
Sheerman, Barry


McGuire, Mrs Anne
Sheldon, Rt Hon Robert


McIsaac, Shona
Singh, Marsha


McKenna, Mrs Rosemary
Skinner, Dennis


McLeish, Henry
Smith, Rt Hon Andrew (Oxford E)


McNamara, Kevin
Smith, Angela (Basildon)


Mactaggart, Fiona
Smith, Rt Hon Chris (Islington S)


McWalter, Tony
Smith, John (Glamorgan)


McWilliam, John
Smith, Llew (Blaenau Gwent)


Mahon, Mrs Alice
Smyth, Rev Martin (Belfast S)


Mallaber, Judy
Southworth, Ms Helen





Spellar, John
Turner, Dr George (NW Norfolk)


Squire, Ms Rachel
Twigg, Derek (Halton)


Steinberg, Gerry
Vaz, Keith


Stevenson, George
Vis, Dr Rudi


Stewart, David (Inverness E)
Wareing, Robert N


Stewart, Ian (Eccles)
Welsh, Andrew


Stinchcombe, Paul
White, Brian


Stott, Roger
Whitehead, Dr Alan


Straw, Rt Hon Jack
Williams, Rt Hon Alan


Stringer, Graham
(Swansea W)


Sutcliffe, Gerry
Williams, Alan W (E Carmarthen)


Taylor, Rt Hon Mrs Ann
Wills, Michael


(Dewsbury)
Wilson, Brian


Taylor, David (NW Leics)
Winnick, David


Temple-Morris, Peter
Winterton, Ms Rosie (Doncaster C)


Thomas, Gareth (Clwyd W)
Wood, Mike


Thomas, Gareth R (Harrow W)
Woolas, Phil


Timms, Stephen
Worthington, Tony


Tipping, Paddy
Wright, Anthony D (Gt Yarmouth)


Todd, Mark
Wright, Dr Tony (Cannock)


Touhig, Don
Tellers for the Ayes:


Truswell, Paul
Mr. Clive Betts and


Turner, Dennis (Wolverh'ton SE)
Mr. Robert Ainsworth.




NOES


Ainsworth, Peter (E Surrey)
Hayes, John


Amess, David
Heald, Oliver


Ancram, Rt Hon Michael
Heathcoat-Amory, Rt Hon David


Arbuthnot, James
Horam, John


Bercow, John
Howarth, Gerald (Aldershot)


Beresford, Sir Paul
Hunter, Andrew


Body, Sir Richard
Jack, Rt Hon Michael


Boswell, Tim
Jackson, Robert (Wantage)


Bottomley, Peter (Worthing W)
Jenkin, Bernard


Bottomley, Rt Hon Mrs Virginia
Johnson Smith,


Brady, Graham
Rt Hon Sir Geoffrey


Brazier, Julian
Key, Robert


Brooke, Rt Hon Peter
King, Rt Hon Tom (Bridgwater)


Browning, Mrs Angela
Kirkbride, Miss Julie


Bruce, Ian (S Dorset)
Laing, Mrs Eleanor


Burns, Simon
Lait, Mrs Jacqui


Cash, William
Leigh, Edward


Chapman, Sir Sydney
Letwin, Oliver


(Chipping Bamet)
Lidington, David


Chope, Christopher
Lloyd, Rt Hon Sir Peter (Fareham)


Clappison, James
Loughton, Tim


Clark, Rt Hon Alan (Kensington)
Luff, Peter


Clarke, Rt Hon Kenneth
MacGregor, Rt Hon John


(Rushcliffe)
McIntosh, Miss Anne


Clifton-Brown, Geoffrey
MacKay, Andrew


Cran, James
Maclean, Rt Hon David


Curry, Rt Hon David
McLoughlin, Patrick


Davies, Quentin (Grantham)
Malins, Humfrey


Day, Stephen
Maples, John


Dorrell, Rt Hon Stephen
Mates, Michael


Duncan, Alan
Maude, Rt Hon Francis


Duncan Smith, Iain
Mawhinney, Rt Hon Sir Brian


Evans, Nigel
May, Mrs Theresa


Faber, David
Moss, Malcolm


Fallon, Michael
Norman, Archie


Flight, Howard
Ottaway, Richard


Forth, Rt Hon Eric
Paice, James


Fowler, Rt Hon Sir Norman
Paterson, Owen


Fox, Dr Liam
Pickles, Eric


Gibb, Nick
Prior, David


Gill, Christopher
Randall, John


Gillan, Mrs Cheryl
Redwood, Rt Hon John


Gray, James
Robathan, Andrew


Green, Damian
Robertson, Laurence (Tewk'b'ry)


Greenway, John
Roe, Mrs Marion (Broxbourne)


Grieve, Dominic
Ruffley, David


Gummer, Rt Hon John
Sayeed, Jonathan


Hamilton, Rt Hon Sir Archie
Shephard, Rt Hon Mrs Gillian


Hammond, Philip
Simpson, Keith (Mid-Norfolk)


Hawkins, Nick
Soames, Nicholas






Spicer, Sir Michael
Waterson, Nigel


Spring, Richard
Wells, Bowen


Stanley, Rt Hon Sir John
Whitney, Sir Raymond


Steen, Anthony
Whittingdale, John


Swayne, Desmond
Widdecombe, Rt Hon Miss Ann


Syms, Robert
Wilkinson, John


Tapsell, Sir Peter
Wilshire, David


Taylor, Ian (Esher& Walton)
Woodward, Shaun


Taylor, John M (Solihull)
Yeo, Tim


Taylor, Sir Teddy
Young, Rt Hon Sir George


Tredinnick, David



Trend, Michael
Tellers for the Noes:


Tyrie, Andrew
Mrs. Caroline Spelman and


Viggers, Peter
Mr. Tim Collins.

Question accordingly agreed to.

Lords amendment disagreed to.

It being after Seven o'clock, and there being private business set down by direction of THE CHAIRMAN OF WAYS AND MEANS under Standing Order No. 20 (Time for taking private business), further proceedings stood postponed.

Lloyds TSB Bill [Lords] (By Order)

Order for Third Reading read.

Mr. Eric Illsley: I beg to move, That the Bill be now read the Third time.
I repeat the declaration of interests that I made on Second Reading: I contribute to an insurance policy with the Abbey Life company, which is now wholly owned by Lloyds, and my wife contributes to a pension with the Target Life company, which has now also been taken over by that company. I shall try to make my comments as brief as possible, in view of the previous business of the House.
In December 1995, the TSB Group and Lloyds bank, two of the United Kingdom's oldest and best-known financial services groups, came together in a merger that provides their customers with the largest branch network of any United Kingdom high street banking group and a range of products to match. The promoters' principal intention is to transfer TSB bank customer accounts into Lloyds bank. The Bill will spare 7 million TSB customers the inconvenience of signing forms to effect the transfer.
On Second Reading, it was apparent that the main issue surrounding the Bill was one of pensions. In recent months, Lloyds has again corresponded with many hon. Members on pensions issues. With the blessing of the House, I therefore propose to devote my speech to the pensions issues that have been raised, or were raised on Second Reading and have been the subject of exchanges and meetings between hon. Members and the bank. I add, in passing, that the Bill was unamended when it left the Opposed Private Bill Committee.
I have two general points to make first in relation to the pension schemes. The TSB Group pension scheme is among the best in the United Kingdom in terms of the benefits packages that it provides, and it is in the top 10 per cent. of UK staff schemes. A comprehensive framework of statutory, regulatory and fiduciary protection for scheme members is in place, which accords with best practice among UK occupational pension schemes.
I cannot emphasise too strongly that the issue of pensions is in no way affected by the Bill. The Bill's promoters wish me to reassure the House again that the position of all their pension scheme members remains, and will remain, fully protected. The TSB Group pension scheme, which has been the subject of comment by the group calling itself the TSB Hill Samuel action group, provides one of the best packages in the country. In addition to all that, the promoters are unaware of any pensioners receiving benefits that do not properly reflect their legitimate contractual entitlement.

Mr. Edward Leigh: My constituent, David Ives, who is a senior former staff member of Hill Samuel, has alerted me to heart-rending stories of pensioners who are living on derisory pensions of as little as £1,000 a year. Naturally, that worries me. I wonder whether the hon. Gentleman can today give a commitment, on behalf of the companies, that pensioners


who receive such small pensions will be dealt with satisfactorily by way of regular payment, or at least a satisfactory one-off payment.

Mr. Illsley: I assure the hon. Gentleman that Lloyds will deal with that matter. It is part of my speech, so I hope that the hon. Gentleman will allow me to make progress. If he had been present on Second Reading, he would know that the issue arose then and was debated extensively. The bank has given assurances to Opposition Members about pensioners on low incomes and has undertaken to conduct a review, to which I shall refer later. The average annual pension for members of the Hill Samuel scheme is £11,700. The average pension under the TSB scheme is £7,800, which compares with a national average for occupational pension provision of £4,800.
Both before and since Second Reading, the promoters have been engaged in active and constructive dialogue with a handful of hon. Members on both sides of the House who have raised pensions-related concerns on behalf of their constituents—as the hon. Member for Gainsborough (Mr. Leigh) has just done. Several hon. Members who initially expressed concerns on behalf of their constituents about the pensions arrangements of Lloyds TSB have now withdrawn their names from the blocking motion against the Bill. I hope that I can provide sufficient comfort to those hon. Members whose names still appear on the blocking motion so that the Bill may be permitted to complete its final parliamentary stage.

Mrs. Cheryl Gillan: Sadly, I was not able to be in the Chamber for the Second Reading debate. However, several of my constituents have raised matters similar to that mentioned by my hon. Friend the Member for Gainsborough (Mr. Leigh). One issue is TSB's production of the guidelines. I understand that the guidelines are complex and that the exercise must be comprehensive, but the fact that they have not yet been produced is causing great anxiety to my constituents. Will the hon. Gentleman confirm that those guidelines will be produced? I received an undertaking from TSB today that they will be produced within a week or so, but does the hon. Gentleman have further and better particulars? It is essential that the guidelines are produced as quickly as possible, bearing in mind the undertakings that TSB gave to other hon. Members on Second Reading.

Mr. Illsley: As I said to the hon. Member for Gainsborough, those issues will be addressed in my speech and, if I am allowed to continue, I shall come to them. As I understand it, the guidelines are a matter of negotiation between the Inland Revenue and Lloyds TSB. Once those negotiations have been completed, the guidelines will be available. If I may make progress, I shall address each issue in turn.

Mrs. Gillan: I understand from TSB that the document is in fact with lawyers and trustees of the TSB scheme.

Will the hon. Gentleman take further advice on the issue, as I understand from the company that the matter rests not with the Inland Revenue but with the company?

Mr. Illsley: I shall refer to that matter when I come to it in my speech—if the hon. Lady will allow me to make progress.
On Second Reading of the Bill, the promoters undertook to put in place a range of measures and initiatives designed to provide comfort to hon. Members, to their constituents who might have concerns and to any other Lloyds TSB pensioners who might be concerned about their pensions. Lloyds TSB has proceeded as fast as practicable, consistent with achieving a reasonable and sustainable outcome. It has adhered to the time scales to which it committed itself. Equally, Lloyds TSB remains acutely sensitive to the necessity of offering help to needy pensioners where appropriate.
Historically, Lloyds TSB has always attached the highest importance to providing additional assistance to needy and elderly pensioners. That is not something new: it reflects Lloyds TSB's responsible attitude towards assisting those who have helped the company in the past. Lloyds TSB provides that assistance through ex gratia payments and a national framework of dedicated pension liaison officers, whose role is to identify cases of hardship and provide appropriate solutions. In this, I understand that Lloyds TSB is unique among United Kingdom companies. The cost of the activity is borne by Lloyds TSB, not by the pension schemes.
In a letter to the hon. Members for Arundel and South Downs (Mr. Flight) and for Aldershot (Mr. Howarth) on the day of the Bill's Second Reading, Mike Fairey, the deputy group chief executive of Lloyds TSB, confirmed that Lloyds TSB intended to undertake a comprehensive review of the position of pensioners on low incomes. The promoters said that they believed that the review would take up to six months to complete, and they intend to honour that commitment.
I am delighted to report to the House that the promoters have embarked on a detailed and meticulous analysis of pensioner records going back over the past 30 years. As the House will understand, that is a complex and time-consuming process. A dedicated team is undertaking that task to ensure that the promoters can properly and expeditiously reach a view about the options open to them to enhance pension values where appropriate, with the agreement of the Inland Revenue.

Mr. Jim Cousins: My hon. Friend will know that I was present for, and spoke during, the Second Reading debate. I have been informed that the number of very needy pensioners is estimated at at least 700 and that, so far, only 100 individuals have been identified. In the light of the assurances that my hon. Friend and Lloyds gave in good faith on Second Reading, we might have expected far faster progress in dealing with the issue.

Mr. Illsley: As I have said, it is a time-consuming process: a review that dates back 30 years will obviously take some time. The figures cited by my hon. Friend are new to me and they have not been advanced by the promoters. I am aware of the cases that are classed as anomalous—some 200—but I am not aware of those figures.
The issue of representations to the Inland Revenue is particularly important. As I have said, everyone will receive his or her full entitlement from the Lloyds TSB pension schemes. Therefore, it may not be possible for the promoters to enhance the pensions of pensioners on low incomes as appropriate and as they would wish without the risk of breaching the normal Inland Revenue rules on maximum allowable benefits from tax-approved pension schemes. I can report to the House that, since Second Reading, Lloyds TSB has held an initial meeting with the Inland Revenue to see what further latitude may be given.
The Inland Revenue has said that it is not prepared to discuss specific concessions until the promoters are in a position to show more clearly how they would structure possible enhancements to the pensions of individual pensioners or groups of pensioners on low incomes. As the House can imagine, that will be a lengthy and difficult task. None the less, the promoters remain committed to continuing this important and constructive dialogue with the Inland Revenue, with a view to seeking a positive outcome. It is open to hon. Members to make their own separate and parallel representations to the Inland Revenue—it would be helpful if they did so—to encourage it to review its position.
The question of anomalous cases was raised on Second Reading. Lloyds TSB has given an undertaking to the hon. Members for Arundel and South Downs and for Aldershot that it will review any cases of alleged anomalous treatment of its existing and deferred pensioners. The promoters are committed to completing their statement of rules and practices as quickly as practicable, and they intend to publish their review as soon as possible thereafter. To date, they have received 200 letters from pensioners, which represents 0.1 per cent. of the total of 180,000 pensioners. Each case is being investigated as a matter of urgency. I have Lloyds TSB's absolute assurance that as soon as it is possible to provide substantive responses to the pensioners concerned, it will do so. A deadline of 3 September has been set for the receipt of alleged anomalies, which will provide ample time for those pensioners who may have concerns to register them.
The promoters have stated clearly and unequivocally that, if Lloyds TSB is unable to resolve satisfactorily any individual pensioner's concerns, they are willing to go with the pensioner concerned to the pensions ombudsman, whom Parliament has vested with the powers to investigate and decide on complaints relating to occupational pension schemes.
I am happy to confirm, too, that, if, in such circumstances, the ombudsman were to decline jurisdiction—for example, on the ground of the expiry of the three-year time limit—the promoters would be willing to appoint a legally qualified person with pensions expertise to review the complaint, using precisely the same terms of reference as the ombudsman would have employed. Lloyds TSB has said that it would do so at its own cost.
An issue that did not arise on Second Reading relates to a situation in Northern Ireland. As the hon. Member for East Antrim (Mr. Beggs) recently appended his name to the blocking motion, I shall try to reassure him. In addition, the promoters want me to reassure the House

and, in particular, those Northern Ireland Members present tonight, that they take seriously the issue of the part-time employees of the TSB of Northern Ireland.
The issue relates to the sale of the TSB of Northern Ireland to Allied Irish Banks by the then TSB Group in 1991. As a result of an administrative error, a number of former TSB of Northern Ireland staff who had transferred their pension entitlements to Allied Irish Banks were subsequently and incorrectly advised that they were eligible for benefits to which they were not entitled. I understand that the matter is now in the hands of the pensions ombudsman. The promoters want me to reaffirm that they regret that error and that they will co-operate fully with the pensions ombudsman.

Mr. Roy Beggs: The hon. Gentleman acknowledges that the TSB of Northern Ireland had more than 100 part-time staff before the merger with Allied Irish. They have been disadvantaged. May I have an assurance that they will benefit from a satisfactory outcome of any review? I am a little surprised that although the matter has been referred to the ombudsman, it has not yet been fully dealt with.

Mr. Illsley: I can assure the hon. Gentleman that Lloyds TSB will fully comply with any decision made by the pensions ombudsman. The issue is outside the Bill, but, in view of the hon. Gentleman's concerns, Lloyds TSB wishes me to raise the matter to try to give some reassurance. If the pensions ombudsman asks Lloyds TSB to reimburse individuals, obviously it will comply with that request.
Concern has been expressed on Second Reading and since by a number of hon. Members about the need to ensure that the position of deferred pensioners is fully protected. I am happy to confirm that, on 19 June 1998, the Lloyds TSB board agreed to the appointment of a deferred pensioner, not only to the board of trustees of the TSB Group pension scheme, but to the board of trustees of the Lloyds pension scheme. The promoters are now seeking to put that initiative in place and the trade unions, the retired staff association and the action group have been invited to put forward prospective candidates.
The deferred pensioner appointee to the TSB pension scheme will be a management rather than a member appointee because, at the moment, a management position happens to be vacant on the scheme's board, providing the quickest way of appointing a deferred pensioner to the scheme. However, I reassure the House that all pension scheme board members represent the interests of all members of the scheme, not just one narrow sectional interest.
The promoters have been keen to ensure that all their pensioners, not just hon. Members, have been kept fully up to date on the various initiatives and activities that they have been putting in place and that I have described this evening. All 180,000 Lloyds TSB pension scheme members have received communications by a variety of means, including pensioner and staff magazines and directly mailed letters.
I hope that the House will feel that the initiatives that I have described provide considerable comfort about the way in which Lloyds TSB has sought to address concerns raised by hon. Members.

Mr. Gerald Howarth: I hope that the hon. Gentleman will excuse me if I do not participate later,


but the Select Committee on Home Affairs is finalising its report. We welcome the board's decision to agree to the deferred pensioner appointment. I know that it has sought to fulfil the undertakings that it gave to me and my hon. Friend the Member for Arundel and South Downs (Mr. Flight), but the hon. Gentleman will know that the action group is concerned that the appointee, whose appointment lies in the hands of the bank, may not be as ruggedly independent as the pensioners would wish. Can the hon. Gentleman assure the House, on behalf of the Bill's promoters, that the bank will appoint a deferred pensioner from management who will be independent? Concern has been expressed that the Banking, Insurance and Finance Union appointments, although BIFU representatives, may themselves be afraid, at a time when the bank is contracting, of being too robust for fear of finding themselves out of a job. Will the hon. Gentleman deal with that?

Mr. Illsley: I am sure that Lloyds TSB will take on board all the comments that have been made about the appointment of the deferred pensioner. As I said, the opportunity arises at this point in time to appoint to the management side of the scheme, simply as a matter of convenience. However, Lloyds asks me to stress clearly that all members of the pension scheme board will act in the interests of all members of the scheme. I am not sure whether that entails anyone acting independently, as the hon. Gentleman would wish, but I am sure that any appointee to the board, because of the rules and duties surrounding trustees, would be obliged to act in the interests of all sides in the pension scheme. Obviously, it remains for pensioners, if they are dissatisfied with the conduct of any appointed trustee, to raise the issue again. I know that Lloyds TSB has given the hon. Gentleman assurances that it will contact him again in future in relation to such matters. The hon. Gentleman will have the opportunity to raise the issue with Lloyds at that stage and to make representations if the appointee does not live up to the assurances given by the bank.

Mr. Eddie O'Hara: Is the system proposed by management for the appointment of the trustee not a classic example of advise and consent, and an example of a commitment that could turn out to be worthless? Does my hon. Friend not see that there are some of us who are reluctant for the Bill to be given Third Reading until we have a meaningful commitment? The only such commitment that I can think of would be a commitment to appoint a trustee in the future who would genuinely be an elected trustee of the pensioners.

Mr. Illsley: My hon. Friend makes a fair point, which I take on board. I cannot give him that assurance now, because the issue has not previously been raised with me; I can say only that the opportunity arises for a deferred pensioner trustee at this point in time. As I understand it, few pension schemes in Britain have a deferred pensioner trustee on the board. I am sure that my hon. Friend would agree that, in the short time since Second Reading, Lloyds TSB has gone a long way towards meeting concerns expressed by hon. Members and by the action group.
We should also bear in mind the fact that we are talking about a Bill that basically implements a merger that took place two or three years ago. The pensions issues,

although relevant and interesting to those hon. Members involved, are not directly related to the Bill. As Lloyds TSB has assured hon. Members, those issues can be taken up outside the Bill's passage and in the future. The bank has given assurances to revisit the issue in due course and I am sure that, at that time, it will seek to ensure that any appointee to the board acts properly and that it will take on board the fact that that person has been appointed to look after the interests of deferred pensioners.

Mr. Cousins: Does my hon. Friend accept that, on the night of the Second Reading debate, the decisive event that prevented a vote was the intervention by the hon. Member for Arundel and South Downs (Mr. Flight), who brought to the House a concession made by Lloyds TSB—as my hon. Friend rightly said, such a concession was not covered by the Bill—that a deferred pensioner trustee would be appointed? Is it not the case that, as we debate Third Reading tonight, that still has not occurred?

Mr. Illsley: The bank has undertaken to appoint a deferred pensioner as a trustee. As my hon. Friend knows, Second Reading took place on 20 April. The hon. Members for Arundel and South Downs and for Aldershot no longer oppose the Bill. The hon. Gentleman who originally raised the issue in the House has been satisfied by the assurances given by Lloyds TSB in respect of deferred pensioners. As I said earlier, few pension schemes have a deferred pensioner as a member.

Mr. Cousins: As my hon. Friend knows perfectly well, the question of the representation of pensioners —of people with preserved rights to pensions—as pensioner trustees in the operation of pension funds is one of the most lively and important issues in pension fund administration at present; indeed, it goes to the heart of all the discussions about flexible labour markets and changing jobs in the course of one's life. If this is an opportunity to address the issue, why not do so?

Mr. Illsley: I take on board what my hon. Friend says, but, on 19 June this year, Lloyds TSB agreed at its board meeting to appoint a deferred pensioner trustee in accordance with the wishes not only of Opposition Members but of the Hill Samuel action group; thus the bank has dealt with the issue that was raised.

Mr. Beggs: Did not the action group seek to have the trustee elected by ballot, rather than appointed by Lloyds TSB?

Mr. Illsley: As I said earlier, the bank approached the trade unions, the action group and the retired staff association within Lloyds TSB for suggestions on how the issue could be dealt with. I am sure that the action group and the association will make suggestions similar to those that the hon. Gentleman has made, to decide who becomes the deferred pensioner trustee in the future.
Lloyds TSB has acted quickly. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) said that there has been insufficient action in the time scale available, but, given that Lloyds TSB has identified a vacancy and sought to fill it with a deferred pensioner trustee, it is moving as quickly as time allows.

Mr. Peter L. Pike: Has not the bank given way because it knows that, once the Bill is enacted and it


starts to rationalise its branches, which is what the merger was all about, there will be many more deferred pensioners? It therefore hopes that, because it has conceded a place for a deferred pensioner, it will get the redundancies, closures and rationalisation through. Is that not what this is all about?

Mr. Illsley: I hear what my hon. Friend says, but, as I said on Second Reading, the bank raised those issues specifically with the trade unions involved. The trade unions had a number of discussions with Lloyds TSB about closures and job losses. I met BIFU to discuss that issue before I even contemplated taking the Bill through the House, because I wanted to be assured on the question of job losses and closures. BIFU assured me that it had received assurances that were sufficient to warrant withdrawing its objections to the Bill. I take on board my hon. Friend's comment about the possibility of further deferred pensioners, but Lloyds consulted the action group, the trade unions and the retired staff association about how the deferred pension issue could be dealt with in the future.
The House should be in no doubt about the importance that Lloyds TSB attaches to the need to resolve those matters as quickly as possible, consistent with the complexities of the issues involved. Lloyds TSB is one of the UK's largest and most successful companies. It has a deep historical understanding of its corporate responsibilities. It plays a leading role in welfare-to-work and new deal issues, and supports a wide range of impressive educational initiatives, including the new teacher awards sponsored by the Department for Education and Employment. On Second Reading, I referred to the work of the Lloyds TSB Foundation, which is the charitable arm of Lloyds TSB. It still hands out £21 million a year, which makes it the UK's largest corporate donor. Its work is focused on communities throughout the United Kingdom.
I hope that I have been able to point out that the promoters of the Bill have provided ample evidence of their responsible, sensitive and inclusive approach to the issues that have been raised throughout our debates on the Bill. I hope that the House will now allow the Bill to make progress following the merger that took place in 1995.

Mr. Leigh: I asked this question before, and the hon. Gentleman said that he would deal with it. I have been asked to ask him what figure the company has in mind, as a one-off or regular payment, for the worst-off pensioners? After all this time, it should be possible for the Bill's promoters to reassure the House on this matter, because, once the Bill gets a Third Reading, we shall lose all power over it, and thus all power to help the poorest pensioners.

Mr. Illsley: The bank cannot say how much is available until it has agreed with the Inland Revenue what concessions will be available for low-income pensioners. The negotiations with the Inland Revenue will take some time in view of the points that I raised earlier, but the bank is taking the issue seriously.

Mr. Howard Flight: I originally signed a blocking motion against the Bill, but I have subsequently been satisfied that Lloyds TSB has

given reasonable undertakings, which were reported on Second Reading and which it is now embarked on honouring.
I appreciate the frustration of the action group, and the points made by other well wishers, that the Bill is an opportunity to encourage Lloyds TSB to deal with the problems, particularly those of low-income pensioners. That opportunity will be lost once the Bill has passed Third Reading.
May I add to the three areas that have been mentioned my perceptions of the outstanding issues? The issue of poor pensioners has involved Lloyds TSB negotiating with the Inland Revenue. The Inland Revenue has required Lloyds TSB to deal with sample cases of some 600 poor pensioners. The bank has embarked on that task with a staff of 12. It has advised me that it still expects to complete its negotiations with the Revenue within the six-month time scale that it agreed in April. I have corresponded with the Treasury on that matter because I hoped that it could be simplified from on high. Although pension scheme rules must be abided by, some form of blanket guidance should be given to the Revenue when very modest pension incomes are involved.
I am satisfied that raising the issue of poor pensioners with the Revenue has not been a stalling mechanism by Lloyds TSB. It has been in earnest and has been negotiating with the Revenue about what can be done. I understand that it cannot give figures about how much it may be able to give, or say what it may be able to do, until it has completed those negotiations.

Mr. Cousins: Why is the hon. Gentleman satisfied and entirely content that Lloyds TSB should have unlimited time within the generous time scale that it gave itself on Second Reading when it has imposed 30 September as the end-date for aggrieved pensioners to make representations?

Mr. Flight: First, the undertaking to address poor pensioners was given in respect of a six-month period. Secondly, the hon. Gentleman has forestalled a point that I want to come to. Lloyds TSB has told me that, although 30 September has been widely advertised by it to invite pensioners who think that they have been treated unfairly and anomalously to write in with their cases, it is not a cut-off date. I am advised that Lloyds TSB will continue to pursue anomalies if it is informed of them beyond that date, which is not a shut-off date, but an incentive for people to submit their cases.
I shall deal with my second point at length.

Mr. Leigh: Before my hon. Friend raises his second point, will he please explain what complex tax arrangements could possibly relate to pensions of as little as £1,000 a year, involve such delays and prevent the company's sponsor, the hon. Member for Barnsley, Central (Mr. Illsley), from giving hon. Members some idea of what the one-off payments would be? On such low pensions, surely those matters are not complex at all.

Mr. Flight: They are relatively complex. Pension funds are bound by two sets of rules—those of the scheme itself and the Inland Revenue rules. The Inland Revenue must make sure that any changes to what is paid out, over and above cost of living adjustments, are in line with its rules


and with the rules of a scheme and the discretion permitted under it. In respect of the 600-sample survey, I understand that the Revenue wants to make sure that Lloyds TSB's proposals fall within the discretion permitted to the pension scheme.
The second issue is anomalies. Lloyds TSB advertised widely to scheme members for people who felt themselves to have been unfairly treated to put their case. The issue has arisen of the guidelines by which such anomalies will be assessed. Lloyds TSB has had to go back over 25 years to examine the policies on anomalies, and two particular areas present problems. First, if a company is sold, what are the pension arrangements for the staff who go with it? The second problem is in respect of individuals who take redundancy or are made redundant above the age of 50.
A team of lawyers has worked on producing the guidelines on anomalies, the purpose of which is not to enable anyone to put up a complaint, but to allow those who complain about anomalous treatment to know the rules of the scheme. Such people should be sent of copy of the guidelines. My hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) raised this issue and has been assured by Lloyds TSB that the guidelines will be available by the end of this month, and certainly within a week. I put it to Lloyds TSB that some people may have held back because they did not know the guidelines and that it would be unreasonable for them to have only a month or so to submit their cases. I also asked whether 30 September was a shut-off date and was assured that that was not the case.

Mr. Beggs: Does the hon. Gentleman agree that it is a serious anomaly that the Irish Bank Officials Association has had to take up the case of 120 former part-time TSB staff in Northern Ireland? Does he also agree that that should be addressed urgently and that any discrimination against them should be resolved?

Mr. Flight: I certainly believe that any discrimination should be resolved. I do not know the details of the problem with the ex-Irish subsidiary, but I understand that the matter has been referred to the pensions ombudsman and believe that, when that happens, an independent and impartial judgment by him is looked for.
More widely, it is fair to say that, until this April, Lloyds TSB was somewhat slow in addressing those issues and that the blocking of the Bill was designed specifically to encourage it to get a move on. I believe that that has been the case, in good faith. Although the delays in respect of the two United Kingdom issues are frustrating, I believe that Lloyds TSB is not stalling, but is bona fide.
The third issue is the appointment of a representative for deferred pensioners. That practice is extremely important, because the number of deferred pensioners in all pension schemes will grow and they should be well represented. Staff representatives were appointed to the TSB scheme following the passing of the Pensions Act 1995. Three were nominated by the Banking, Insurance and Finance Union, the trade union representative, and one by the retired staff association. As required under the 1995 Act, the appointments were circulated to all

members of the scheme, which gave them the ability to object. They did not object; in effect, they endorsed. At present, representatives are nominated by the member representative bodies, but formally appointed by the pension fund trust board.
In respect of the Lloyds pension scheme, there is already a voting situation. Although there are arguments that elections are preferable, Lloyds has offered the slot of a management representative to achieve speedy representation of deferred pensioners and has requested that the trade union representatives, the Lloyds action group and the retired staff association propose candidates.
The current arrangements for all staff representatives run until 2002—appointments are for five years—but, given that the Lloyds scheme has an elective basis, it may be better practice and more consistent for Lloyds to consider moving the TSB scheme to an elective basis for all member representatives, as well as for the deferred pensioner representative, by that date. Lloyds has not committed so to do, but it has suggested to me that it will consider the argument and thinks that it may be desirable to move to a consistent basis in this matter for the Lloyds and the TSB pension schemes.

Mr. Cousins: I remind the hon. Gentleman that his intervention at a similar point in the debate on 20 April led us to believe that a deferred pensioner trustee would be appointed. From the assurances that he gave, not on behalf of TSB but in a speech similar to this, we had every expectation that that would be the case. Now, that is not the case, and his response is to give us a further set of assurances that some no doubt highly desirable things may happen by 2002.

Mr. Flight: With respect, I do not think that the hon. Gentleman quite understands what I am saying. Lloyds TSB will appoint a deferred pensioner representative: it has agreed to do so, it has asked the representative bodies for nominees and it is waiting to receive from BIFU, the action group and the retired staff association the names of candidates that those bodies would like to be appointed.
We are talking about the issue of appointment versus election. If an election process were embarked on immediately, it would still take at least a year to accomplish, because it would involve the period between getting the election organised and the early retirement of existing staff representatives. Lloyds TSB is taking the speediest route open to it to appoint a deferred pensioner representative.
I think that, above all, the deferred pensioner representative should be able to discharge his or her responsibilities. While the elective principle is desirable in the round, it is particularly desirable for an individual representing deferred pensioners to know and understand the issues and problems affecting such pensioners in regard to pension schemes. I do not think that it is not in the spirit of, or not in accordance with, the undertaking given by Lloyds TSB for it to agree to the appointment of a deferred pensioner representative, and it is now asking the representative bodies involved to nominate such a representative.

Mr. Peter Brooke: It is possible that there is a misunderstanding between my


hon. Friend and the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins)—although that is not the fault of the hon. Gentleman. The concession given to my hon. Friend on 20 April stated:
However, in the light of your helpful suggestion, we will also consider the possibility of the appointment of a deferred pensioner to the board of the TSB pension scheme.
I do not know whether my hon. Friend agrees with me, but I think that to have achieved the creation of a job within two months constitutes a pretty honourable fulfilment of what began as simply consideration.

Mr. Flight: I thank my right hon. Friend for making in such a fluent way the point that I sought to make.

Mr. Cousins: It is not the hon. Gentleman's honour that causes me concern; what causes me concern is the progress of events.

Mr. Flight: That is what causes us all concern. My point is simply this. The process of putting a deferred pensioner representative on to the board is being dealt with, and the nominations of representatives is awaited; but there is a separate issue—whether all staff representatives of trustees of the pension scheme should be elected for the purposes of the TSB scheme, as with the Lloyds scheme. Lloyds TSB has told me that it is prepared to consider that for the next round in five years' time.

Mr. O'Hara: Would deferred pensioners ever have an opportunity to object to someone who might be selected by management?

Mr. Flight: I understand that Lloyds TSB is not interested in appointing anyone other than someone with the blessing and support of the three representative institutions. It looks to the unions, the retired staff association and the action group to come up with candidates who have the experience to discharge the obligation, and with whom those representative bodies are happy. It is not thinking of appointing its own candidate.

Mr. O'Hara: Is the hon. Gentleman assuring me, on behalf of the company, that it will not ignore nominations of deferred pensioners and choose someone else to appoint?

Mr. Flight: I am not a representative of the company, but I asked it precisely that question. It gave me to understand that—as I have said—it looks to a nominee from those bodies, rather than intending to appoint its own nominee, or a nominee with which the representative bodies are not entirely happy.

Mr. O'Hara: With respect, "looking to" does not sound as strong to me as a guarantee that that is what Lloyds TSB will do.

Mr. Flight: I repeat that I am not in a position to give guarantees on behalf of Lloyds TSB; but, having been involved in similar situations, I believe that the company wants a deferred pensioner representative who has the full support of staff and the various representative bodies, and

has set about organising that. I personally feel confident that that is its good-will intent: I do not think that it wants to appoint some stooge.
Although opposition to the Bill has hastened and encouraged discussion of issues that needed to be addressed, I believe that management is honouring the commitment given to my hon. Friend the Member for Aldershot (Mr. Howarth) and me in April. It has taken time to get where we are now, not because of stalling but because of the complexities of the issues. This is an important day, in that, if the Bill is given a Third Reading, the leverage involved will be lost. Hon. Members must make an important judgment when they vote; but I shall vote for Third Reading. I believe that the way to make progress as quickly as possible is to ensure active co-operation between BIFU, the retired staff association, the action group and Lloyds TSB management. They must be encouraged to get a move on, and to implement the commitments that have been given.

Mr. Jim Cousins: I regret that we should find ourselves in such an extraordinary situation. The debate should not have been necessary: the matters that were raised in the Second Reading debate of 20 April should have been dealt with conclusively then, or set on a fair course with, demonstrably, no obstacles ahead. If that had happened, this issue would now be being resolved.
Interestingly, during the intervening time other matters directly related to the text of the Bill have remained unclear. For instance, we still do not know how our largest bank network—Lloyds TSB—will deal with the rationalisation of its branches, and the attendant loss of service and employment. We might have hoped for some clarification of that.
Pension issues have rightly dominated this short debate. It is not just a matter of detail affecting a particular group of people; it is a matter of fundamental principle. Whose property is the pension fund surplus? Who is the source of the power that should direct pension funds and their distribution? That will be a fundamental issue in other debates on pensions, and it goes to the heart of tonight's debate.
As the hon. Member for Arundel and South Downs (Mr. Flight) rightly said, one of the few opportunities that Members of Parliament have is to impose blocks to try to force conclusions, and it is regrettable that we have not been able to do that tonight. Before this debate, it occurred to me to wonder how matters such as this came to be dealt with at board level.
Mr. H. R. Freedberg was the leading light in Hill Samuel and was a former director of the TSB. He received £290,461 in compensation for loss of office as a director of the Hill Samuel bank. In addition, £657,000 was paid from a separate fund to enable him to obtain a pension on his earnings that exceeded the maximum pensionable salary allowable under the TSB Group pension scheme. That information is contained in the annual report. Mr. Freedberg did not have to wait. Nobody said to him, "We cannot do anything for you. We have to sort it all out with the Inland Revenue."
Mr. Freedberg's treatment contrasts with the cases that have been brought to me and to other hon. Members. I shall not give names. Mrs. M. had a deferred pension


of £375 a year for 17 years full and part-time service. Mrs. N., who is a single parent, received no pension for 15 years' service. Miss F., who was aged 83, was below the poverty line after 29 years' service and was sent to the Bankers Benevolent Fund for a hearing aid.
According to the annual report, Sir Nicholas Goodison, who was the chairman of TSB, received a payment that was equivalent to 22.5 per cent. of his salary. That was in line with Inland Revenue guidelines. He was caught by the guidelines, but not unfavourably, it seems. That payment was to enable him to contribute to a personal retirement annuity plan. If the plan does not provide Sir Nicholas with a pension at the age of 65 that is equal to two thirds of his final salary, the company has undertaken to make up the difference, subject to a maximum annual payment by the company equivalent to 31.67 per cent. of his final salary.
The treatment of some of those who directed TSB affairs, therefore, contrasts with how ordinary pensioners with preserved rights, some of them made redundant many years ago, have been treated. The point of our proceedings is to close that gap and force equity of treatment. The debate should not be necessary because these matters should have been dealt with already.

Mr. John Hayes: I am impressed by the passion with which the hon. Gentleman presents his case. He has presented the purpose of our proceedings. Will he go further and say how the Government should be involved? He describes cases, and rightly calls for equity of treatment. Surely the Government have a specific responsibility to bring some of the fat cats that he describes into line. I hope that the Minister will comment on that.

Mr. Cousins: I cannot join the hon. Gentleman in saying that the pension review should state how we should address the gap between the pension of Sir Nicholas Goodison who, regrettably, may not achieve two thirds of his final salary even with the extra top-up and may need a further top-up from the company equivalent to 31.67 per cent. of his final salary, and the pensions of others. Sorting out his problems should not be a priority for the Government in considering future stakeholder pensions. Perhaps, though, he provides some kind of benchmark, which I understand is the art term that we are allowed to use when discussing such matters, for judging the treatment of other pensioners.
It was clear on 20 April that legal action was in hand to protect members of the Irish Bank Officers Association in their representations on behalf of former part-time employees of the merged bank. The House was not told about that at the time and the matter came to light only within the past few days. It is regrettable that it, too, has not been addressed.
Lloyds TSB has not stated the figure that it has in mind for a one-off payment to the worst-off pensioners. Some hon. Members, myself included, have been told the likely sums. Perfectly properly, we have been asked not to share that information with the House. However, by now the suggestions and figures should be public knowledge so that the beneficiaries know where they stand.
We still do not have guidelines. We are told that the matter is complicated and that teams of lawyers are working on it, but we are debating one of the greatest of

our financial institutions. In heaven's name, if it cannot produce guidelines for a relatively small section of its business and a small number of people over such a period, that is a poor comment on the institution.

Mr. Brooke: It has been my understanding, although I realise that the hon. Gentleman has been in frequent touch with the bank, that the guidelines deal with the manner in which the pension scheme has evolved over the past 25 to 30 years, and that they would enable shareholders to determine whether they have sustained anomalies on which they should claim. That is quite different from the review of low-income pensioners.

Mr. Cousins: Perhaps significantly, the right hon. Gentleman speaks of shareholders when he means pensioners. That confusion is significant because, in a sense, it goes to the heart of our debate.

Mr. Brooke: I am grateful to the hon. Gentleman for picking up a slip of the tongue, if I made one. However, he did not answer my question.

Mr. Cousins: No, I did not—and I made a brief debating point for which I hope the right hon. Gentleman will forgive me.

Mr. Leigh: Will the hon. Gentleman give way?

Mr. Cousins: Of course.

Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Gentleman must deal with one intervention before he starts another.

Mr. Cousins: I accept your guidance, Mr. Deputy Speaker.
I shall deal with the guidelines. There are a number of pension schemes with different rules. Although pension schemes have not come together, the organisations that support them have joined together over the years. I do not dispute that there may be some intricacies in that, but it is extraordinary that one of our greatest financial institutions cannot resolve these matters even though they have been brought to its attention over many months. I accept that there may be difficulties, but they should not require so much time to resolve; and still we have been given no sign of when they might be resolved. That is extraordinary.

Mr. Leigh: Interestingly, the hon. Gentleman said that he had been given some intimation of the one-off payments. He rightly added that he could not share that information with the House. Much has been made of the fact that negotiations are continuing. However, it is not clear why they should be so complex. The Treasury has relaxed its rules on augmenting low pension schemes and presumably it would save money if people could be removed from social security. Could the hon. Gentleman put pressure on his Treasury colleagues to speed matters up; and could he ask why there has so far been no answer?

Mr. Cousins: The hon. Gentleman makes a fair point. It is extraordinary that we have had no information on what the sums might be. Such information would


illuminate discussions with the Inland Revenue. Evidence from correspondence shows that the Revenue wishes to resolve this matter.
From the Government's standpoint, this is an absurd situation. TSB pensioners are receiving income support and other state benefits, whereas, if this deal were struck, they could be receiving pensions from the pension fund to which they contributed earlier in their working lives, and the Department of Social Security would not have to meet their expenses.
Of course, the Government will not stand in the way of a deal, and there are clear signs that the Inland Revenue is willing to co-operate. The reference to the Inland Revenue is, frankly, an obfuscation. Even if there were continuing administrative difficulties with the Inland Revenue which might not have been resolved, I do not understand why an intimation could not have been given to the pensioners who were the likely recipients. They would then be able to make representations, if they so chose, through their Members of Parliament and to the Inland Revenue.

Mr. Brooke: The hon. Gentleman picked me up on the use of the word "shareholder." If the dilemma for the bank is whether ex-gratia payments should be made from shareholders' funds or from the pension fund, which, in turn, is affected by the Inland Revenue's reaction, it seems reasonable for the bank to wait and see what the Inland Revenue's view is. The pensioners might be a great deal better off if the money came from the pension fund.

Mr. Cousins: The entirely theoretical point that the right hon. Gentleman makes cannot be resolved until actual figures are known by actual people, who can then arrive at a decision, by themselves or with their advisers, about the proper course of action. The House is entitled to argue that the figures should have been known. On Second Reading, the House was told that they would be known very shortly. We now find, three months later, that there are still no figures.
I am looking at the clock, as I do not want to test the patience of our new regime in the Whips Office unduly. I shall therefore refer quickly to the matter of the deferred pensioner trustee. That issue has been dealt with extensively in the debate, including in my interventions and those of my hon. Friend the Member for Barnsley, Central (Mr. Illsley). Plainly, we are not satisfied, as the matter could not have been dealt with in good faith. We accept that it would have been a management pensioner trustee: that would have been the form. None the less, it would have been possible to achieve, even within that form, far greater progress towards the selection of an individual, on the basis of consensus, who would have been satisfactory to all the interests concerned. That would have met the needs of Lloyds TSB perfectly properly, because it would have contributed one of its management trustee places. I do not deny the necessity to satisfy Lloyds TSB on that point.
The hon. Member for Arundel and South Downs referred to the assurances given. I do not seek to burden him with an obligation to deliver on those assurances, but it is extraordinary that further progress cannot be made.
To whom do these pension funds belong? That is the fundamental point. How can we protect the interests of pensioners with preserved rights who may have been

part-time employees for only part of their working lives? Such people will become increasingly common in the pension fund discussions of the future.
Lloyds TSB, which is a great financial institution, may be thoroughly irritated by the fact that it has to go through a parliamentary procedure during which it is criticised for the delays—I am sure that it feels a certain loss of dignity—but the House is entitled to say that these are important principles, and that before we pass this legislation we should be entirely satisfied. If we cannot be completely sure that everything has been done and dusted, we should be sure that it is clearly on course to be done and dusted. Sad to say, that is not the position tonight.

Dr. Vincent Cable: I shall just say a few words, because many of the key points have already been made, particularly in the speech of the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) and in some of the exchanges. I spoke against the Bill on Second Reading, and for a while acted as a block on it. I have been briefed and counter-briefed by the two parties, and, like many hon. Members, I have sometimes found it difficult to judge what is fair and reasonable in the progress that has been made.
I have some residual concerns, which have been increased by the fact that the public's interest in this matter—especially my constituents' interest—grows as the delay continues. Until Second Reading, I had received no representations from constituents: I was passing on thoughts from colleagues' constituents. However, within the past 10 days, two difficult cases have shown the importance of the delay that the House has achieved.
The issues have already been dealt with very well, but a few points have not been made. On low-income pensioners, the hon. Member for Barnsley, Central (Mr. Illsley) summarised the state of discussions with the Inland Revenue. It is not clear why, in other cases, such as that of British Coal staff, it was possible to achieve considerable enhancements of benefits for low-income pensioners with the full support and co-operation of the Inland Revenue.

Mr. Illsley: The hon. Gentleman referred to the enhancements of benefits under the British Coal superannuation scheme. They were within the rules of the scheme. The Government received a half share of the surplus of that scheme because, at that time, they owned the surplus. They were the employer, having taken over from British Coal after privatisation. Those enhancements to pensions were made under the rules of the scheme.

Dr. Cable: I thank the hon. Gentleman for that clarification. One category is particularly disadvantaged by the current arrangements and needs some attention. We are talking not only about low-income pensioners but about older pensioners, particularly people who retired before 1972, which was the crucial date. Some of those people apparently have no pension whatever. A significant number of them need particular attention, and I should be grateful if the hon. Member for Barnsley, Central clarified that point when he replies to the debate.

Mr. Flight: >: This is a much bigger issue than merely Lloyds TSB. It was only in 1973 that the law changed


to require the preservation of pension rights. Most company pension schemes and individuals employed by government in its various forms who left before pensionable age suffer from this problem. The question is whether the big issue of preserved rights pre-1973, which applies to all pension schemes and is separate from the more particular issues, can and should be addressed.

Dr. Cable: Surely the bank had the option of dealing with this issue generously—and had the surplus to do so.

Mr. Cousins: It is perfectly true that the law changed in 1972, and some companies have addressed the problems. Lloyds TSB, with a pension fund surplus of many hundreds of millions of pounds and a pension contribution holiday of 20 years, has elected not to do so.

Dr. Cable: That is precisely the point.
Secondly, there are the anomalies. The bank argues that it had a limited number of anomalies, and that it is grinding through them and taking them seriously. There is a circularity in the argument. The banks ask, "If there is such a big problem, why aren't there more anomalies?" The trouble is that many of the people who are on the threshold of difficulty do not know whether they are the subject of an anomaly. That is why there is a search for clarity and a need for guidelines. Unless there are guidelines, many of the anomalies will not surface because people are not conscious of them. Although I accept what the right hon. Member for Cities of London and Westminster (Mr. Brooke) said about the inherent difficulties of producing guidelines and about the long and complex history involved, if we are to get to the bottom of the matter the bank must be a little more forthcoming.
A third point, which we have debated across the Chamber, is the deferred pensioner representative. The issue is no longer the fear that the bank may put up a stooge, but that it may put up someone who, although he may act independently, has been nominated and can therefore be removed if he asks awkward questions. Several hon. Members have made that point. The election process, although more cumbersome, is not only more democratic but would help to lance the boil and deal with the bitterness that lies, at least in part, behind the argument.
My final point relates to what the hon. Member for Newcastle upon Tyne, Central said—it is partly an issue of principle and partly a point of law—about members of the fund having an interest in the surplus and how that interest is to be guaranteed. I understand that legal judgments have already been made which define the extent to which members of pension funds have an interest in the surplus, but it is difficult for pensioners to pursue that. This is not an academic point; it is a legitimate one, because the bank may make new acquisitions and changes. There are press reports, which may be false, to the effect that the bank has been circling around the Nationwide building society. If there are to be changes that will have a major impact on the pension scheme and its surplus, it is important to make the interest that members have in the fund more concrete.
As a new Member, I very much value the opportunity to exercise a limited but important power, which in this case has achieved a substantial objective by bringing the

two parties closer together and advancing the cause of pensioners—although I am not fully satisfied that everything that could be done has been done. However, we have achieved something from our combined efforts.

Mr. Eddie O'Hara: I shall be brief and try not to cover too much of the ground that has already been covered. I declare a sort of interest as I have been a customer of Lloyds bank for almost 40 years and I have many accounts and arrangements with it.
My concern is for my constituents who are pensioners. It has been said that the question overhanging Third Reading has provided a momentum to the resolution of certain issues. However, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) pointed out, there is all the difference in the world between having assurances—no matter in how much good faith they are given—and having matters buttoned down. I am not satisfied that, if the Bill is given a Third Reading, the momentum will not cease; I am not satisfied that the assurances, commitments and concessions will come to fruition. Much hangs on the granting of Third Reading tonight.
The two issues interrelate and I do not think that I need to say more about the issue of the poor pensioners and the anomalies that must be addressed. I would prefer to be able to say that they have been addressed, rather than that they are being addressed, because that would make all the difference in the world.
The pension fund is very buoyant—£1 billion—with 20 years' contributions stretching up to about 2015. The treatment of the victims of anomalies and the poor pensioners is dependent on the future health of the fund. No one is suggesting that the group will raid the fund, but it is vulnerable to weakening and dilution through being merged with the funds of companies that are taken over by the group. There is also concern that the TSB pension fund, in particular, may be managed in the interests of the shareholders rather than the pensioners. That is why the issue that I have raised several times during the debate is crucial.
The pensioners have been assured that their interests are protected under the 1995 Pensions Act. However, if they wish to defend their interests in law, that may involve litigation that is far beyond their means, especially if it is resisted by the bank, with all the resources at its disposal. Therefore, it is crucial that their interests are protected by the trustees. They cannot be confident of that if the trustees are management appointees and current employees—who, as has been suggested by some hon. Members, might feel vulnerable. That is why the appointment of the pensioner trustee is so important.
I shall not repeat my continuing concern about the basis on which the pensioner trustee is to be appointed. I have made my views clear a number of times during this debate. I do not feel able to vote for Third Reading until all the assurances are much more buttoned down, rather than given in good faith.

Mr. Edward Leigh: Like other hon. Members, I come to the debate because constituents have raised the issue with me. I was chided by the hon. Member for Barnsley, Central (Mr. Illsley) for not having


taken part in the Second Reading debate. I apologise for that, but just because someone does not take part in Second Reading does not mean that he or she is not entitled to take part in the Third Reading debate—especially when constituents have raised the issue.
I come new to these matters, like many hon. Members. We are dealing with a large company, and a large and buoyant pension fund of some £1 billion. I was horrified by the appalling hard luck stories of people who had given a lifetime of service, but were receiving derisory pensions, which is why I decided to come here and try to put the company on the spot. As has been said, this is our last opportunity to do that.
It is an important issue, especially for Conservative Members, because although we believe in capitalism and in management being given adequate rewards—I do not want to follow the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) in criticising the top management because no doubt it has been instrumental in building up a successful company and fund—we also believe in the principle of morality. We believe in looking after people who are not part of the top management and who have very little power to wield, but who look to us to protect their interests. It was the appalling stories that provoked my interest in the matter.
I came here tonight with a simple question—will the hon. Member for Barnsley, Central explain the nature of the one-off payment? When he said that that was a fair question, but that difficult negotiations were continuing with the Inland Revenue, I was satisfied. I assumed that those were terribly complex matters which would delay the Treasury for some time. However, the more that I have listened to today's debate, the less I am convinced by those arguments.
The Second Reading debate was on 20 April; we are now at the end of July. I have been informed that the company went to the Inland Revenue only in June to discuss the matters. I am worried that there has been some dragging of feet, although I may be wrong about that. Perhaps the hon. Member for Barnsley, Central can reassure me that that has not happened, and that the company immediately started discussions once the commitments were given in the Second Reading debate. Why did the company even have to wait for the Second Reading debate before starting discussions? Surely the matters must have been considered long ago. Surely Parliament has been considering the Bill for the best part of a year.
Why—at this last gasp—are we still waiting for the figures? The hon. Member for Newcastle upon Tyne, Central has informed the House that he and other hon. Members have been given some intimation of the figures. I have been told by those who briefed me on behalf of the action group that my hon. Friends the Members for Aldershot (Mr. Howarth) and for Arundel and South Downs (Mr. Flight) also have been given some intimation of them. Hon. Members on both sides of the House now tell us, "Of course we cannot share those figures with you." Why is that so? Although I realise that it would be invidious to mention individual cases—people by name, what they receive now and what they might receive in future—I can discern no clear reason why the figures should not now be shared with the House.
We are debating the Bill's Third Reading. Once the Bill is passed, we will have no more power over those matters. Why cannot the information be shared with us now?
Why have the negotiations been so complex? I am very conscious that the Paymaster General is in the Chamber and presumably will be replying to the debate. He thoroughly understands the matters that we are debating and is well-respected for that knowledge. As I said in earlier interventions, we are talking about pensioners receiving very small sums under fairly easy-to-understand schemes. We are talking not about great complexity, but about saving public money by getting people off of social security.
The British Coal point was made by the action group in its briefing for hon. Members. The hon. Member for Barnsley, Central dealt with that point, saying that the British Coal scheme was a different type of scheme and that the rules were, therefore, not so complex. However, surely there must have been many other schemes that are similar to the one that we are debating now. Surely similar negotiations have been held in which it has been fairly easy to resolve similar matters.
It is very important that, when the Minister replies to the debate, we should put him on the spot and discover who is delaying a resolution. I have been told that, when Lloyds TSB was asked whether Inland Revenue consent was the only condition precedent to an additional payment for the worst-off, it was stated that it was not, and that the Lloyds TSB. representative—the deputy chief executive, Mike Fairey—was equivocal about what other issues he had in mind.
Either the company should have been able to give us the figures today, but for the fact that the negotiations were continuing, or there have been other reasons why they cannot be given to us. One of those must be right. If there are other reasons, they have not been shared with the House today, which is greatly disappointing.
I very much hope that, in the short time left in this debate, we shall hear from the Minister that the negotiations are progressing satisfactorily and that the Treasury is not in any shape or form delaying them. If the hon. Member for Barnsley, Central is allowed to reply to the debate and catches your eye to speak, Mr. Deputy Speaker, I hope that he will be able to give us some information—before we pass the Bill into law—about how those very worthy people who have given a lifetime of service can be helped by the company.

Mr. John Hayes: My hon. Friend the Member for Gainsborough (Mr. Leigh), as ever, has been excessively modest and excessively moderate. He was really saying—I think that this needs to be said, as the context of the debate is important—that, as the Minister knows perhaps even better than my hon. Friend, unbridled and unfettered capitalism is a harlot.
The debate is really about small, ordinary people against the big battalions. The House is at its best when it articulates the needs of small, vulnerable people. What greater or more noble goal can there be for hon. Members than to articulate the needs of the most needy and the case of those who are least able to make their own case? Surely that is the most noble role to which hon. Members can aspire.
There have been unacceptable delays in the matter. I join the debate not because of a specific interest in banking or mergers, but because of a particular interest in


the needs of individuals who have approached me, as they have approached hon. Members from both sides of the House, with very painful stories. Hon. Members on both sides of the House have told us some of those individuals' very distressing stories, which—although it would be wrong to repeat them in detail—have moved many hon. Members to take a specific interest in a subject in which otherwise they might not have taken such an interest.
Some specific questions have to be asked. It is all very well to talk about the difficulties of implementing ex gratia payments—I respect the judgment and knowledge of my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) on the matter—but some notional figures or estimates could have been given and a firm timetable could have been offered. Such information has not been forthcoming since the Second Reading debate.
The Government have a critical responsibility in the matter. I ask the Minister to give three specific assurances.

Mr. Insley: The hon. Gentleman and other Opposition Members might be under a misapprehension about the Government's role in the Bill's passage. The Government play no role and have no locus in private Bills. It is, therefore, unlikely that the Minister will respond to the issues that the hon. Gentlemen are raising.

Mr. Hayes: It would have been helpful if the hon. Gentleman had waited for me to articulate the specific points before he stated the Government's responsibilities. Ministers do have a responsibility to give us a view on the more general issues aired by the specific matter dealt with in the Bill: ownership of pension funds.

Mr. Illsley: rose—

Mr. Hayes: I shall not give way again, because I want to speak only briefly. It would be surprising if the Minister did not deal in a reply with this general matter, which has been mentioned by so many hon. Members speaking in the debate.
Who is responsible for the delay? We have heard about protracted negotiations with the Revenue, but why were those negotiations so protracted? As my hon. Friend the Member for Gainsborough said, one might have thought that the negotiations should be relatively straightforward for some of the individuals involved. We certainly deserve more than the brush-off of claiming that there are private matters upon which the Government should not take a view.
We have to receive from the Minister at least some commentary and observations. I am not suggesting that the matters are directly within his competence, but I certainly presume that he will want to make known his and the Government's views on them. If he does not do so, it will not bode well for the Government's reputation among the many pensioners who are very appropriately and reasonably seeking redress and answers to queries.
I come to the debate in that spirit, and hope that the assurances that various hon. Members have given will come to fruition. I hope also that we will use this matter as an opportunity to explore the wider and broader issues.

I hope that the matter throws some light on those issues, and that the problems will not be repeated in similar situations.

Mr. Desmond Swayne: I come to the debate late. I must confess that my eye has not been on this ball over the past few months and that my mind has been exercised by other issues. However, I have been alerted to the problem by constituents in recent weeks. As a consequence, I have been in correspondence with Lloyds TSB and had conversations with colleagues on the issue. I have found this evening's proceedings enlightening.
However, I am still in the dark on a fundamental question. I hope that the hon. Member for Barnsley, Central (Mr. Illsley) and those on the Front Benches may cast some light on it. What great injustice is to be avoided by giving the Bill a Third Reading and what great public good is to be lost—what opportunity is to be missed—if the Bill is denied a Third Reading?

Mr. Illsley: The issues that we have discussed on pension enhancement and anomalies will not be addressed. If the Bill is not passed, what incentive is there for Lloyds TSB to address those issues again?

Mr. Swayne: I am thoroughly mindful of those issues. I want an explanation of that and of what is to be achieved by the Bill. I am in the dark about the primary purpose of the Bill. I should like that to be explored in the winding-up speeches.

Sir Geoffrey Johnson Smith: I do not want to go over the ground that has already been covered expertly by hon. Members on both sides. I do not have the deep knowledge of some on the problem. I have been alerted by a distinguished constituent who was a public servant for many years and, on his retirement, became an employee of Hill Samuel. He has written to draw my attention to his case and that of a woman who served Hill Samuel in a more humble capacity for more than 20 years.
While serving with Hill Samuel, the gentleman paid the maximum allowable amount of additional voluntary contributions. When he retired, he was advised that those AVCs should be used to ensure that his pension was index-linked. As his Hill Samuel pension has been upgraded to meet the cost of living increases under the terms of the scheme, it has not been necessary for the trustees to draw on his accumulated AVCs. He considers that he was wrongly advised when he retired at the end of 1991 and requests that the mistake be rectified. It seems straightforward to request that the AVCs should be used to increase his pension, as intended.
My constituent understands that those who retired from Hill Samuel received enhancements to pensions. He has written more than once to find out the basis on which the enhancements were made and why he was not included. That is a legitimate question. Like many who have spoken in the debate, he does not know the reason for the delay.
My constituent's secretary worked at Hill Samuel for 20 years until she was made redundant in 1992. She received a lump sum, but no pension, because she had not reached the age of 50. I do not have the figure of the lump


sum, but my distinguished constituent believes that it was not generous, given her long and faithful service. He wants to know why the initial figure that was quoted to her orally was later reduced for no apparent reason. The lady in question has been unable to get a satisfactory answer.
Those two cases—one involving a gentleman who received a pension from his previous service and then another one for which he paid AVCs; the other involving a lady who was employed in a more humble capacity—show that something has gone wrong with the company's pensions.

Mr. Peter Brooke: I declared my interests on Second Reading. I shall not declare them again. We agreed on Second Reading that the Bill did not have specific relevance to pensions, although we were allowed to discuss the issue. The concession letter of 20 April to my hon. Friends the Members for Aldershot (Mr. Howarth) and for Arundel and South Downs (Mr. Flight), to which frequent reference has been made, was an imaginative lubrication to the Bill's passage, but it did not speak to the tone and text of the Bill.
I should like to add a personal note to the comments of the hon. Member for Twickenham (Dr. Cable). He and I blocked Third Reading initially with a cry of, "Object." In that respect, we have played some part in bringing this evening's proceedings about.
I would have dwelt on the issues raised by the hon. Member for East Antrim (Mr. Beggs) had he still been here. I have taken the trouble to verify the actuality in the case of the part-time former employees of TSB in Northern Ireland, and satisfied myself that the company has behaved properly. I shall not detain the House on that.
We are addressing three issues, relating to those on low incomes, those with anomalies and the deferred pensioner trustee. I shall dwell on each of those briefly.
Like many great companies, Lloyds TSB has a team, consisting mostly of former employees of the company, who go round visiting pensioners to verify that their conditions are satisfactory. The team reports back on the conditions of those pensioners. Before the Hill Samuel action group was created, Lloyds TSB visited the Inland Revenue to verify whether there were ways in which it could augment those pensions, provided that that augmentation would not be treated simply as a substitute for social security payments, which would be reduced pan passu with the extra pension. The Inland Revenue politely showed the Lloyds TSB team the door, and said that no action could be taken.
The visit of Lloyds TSB to the Inland Revenue in June, which was brought forward, was a response to the commitment to conduct a full review of all those on low incomes. Lloyds TSB said that that would take six months. We were told on Second Reading how long the review would be. With the debate taking place on 20 April, it would go through to 20 October. The Inland Revenue said that there was no point in discussing the issues unless Lloyds TSB came back with its proposals. The Revenue said that it could not discuss anything without specific proposals to consider.
We may feel that fate is being unfair and the Inland Revenue is being unimaginative, but Lloyds TSB is doing its best to deliver in line with the Inland Revenue's

request. That request goes back to the issue of ensuring that what is given by Lloyds TSB is not taken away by the Treasury to return to the Department of Social Security.
I may be the only Member speaking tonight who does not know the figure that Lloyds TSB has in mind, so there is no need for anyone to intervene on me to ask what the figure is. I see the hon. Member for Barnsley, Central (Mr. Illsley) saying that he is in the same position.
I should tell those who are concerned that the process should be accelerated that, when Lloyds TSB is in a position to know the outcome of its review, it will in all courtesy want to discuss that with the unions that represent 58,000 people before going public on it, so that the issue is agreed. The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) said that people have to know what they might be given before they can make up their minds, but that is not the issue. The issue is what the Inland Revenue rules will be. Until Lloyds TSB knows the Inland Revenue rules, it cannot come forward with a proposition, because it does not know from which pocket of its coffers it would be paying.
As for the anomalies, there has been some criticism about the length of time it is taking to produce the guidelines, although some charity has been exercised in recognising the complexity of the matters concerned. One problem is exactly the same as exists in the context of pensions mis-selling: when pensions were originally granted or arranged, the law of the land did not require the holders of pension funds to keep much of the information that is now required. An enormous amount of archival work therefore needs to be done to examine what circumstances applied to particular individuals at the time. That affects the time it takes to produce guidelines.
My best understanding of the timetable for the issuing of the guidelines marches with that of my hon. Friend the Member for Arundel and South Downs—that, although they are now before the lawyers, they still have to be run in front of the chairman of the pension fund. We are talking about weeks, and I am confident that, although 30 September is the deadline by which people should raise their anomalies, if Lloyds TSB fails to produce the guidelines before the middle of August so as to allow a further six weeks for anomalies to be brought forward, we can expect the company to be flexible. However, I have no direct authority for saying that.
We are all saying that Lloyds TSB is being impatient in terms of the deadlines that it is setting, but it is worth reminding the House that the Hill Samuel action group first approached the bank in November, but did not produce details of a single anomaly before Second Reading. On the Friday—17 April—it sent through the mail a list consisting of a couple of hypothetical anomalies that Lloyds TSB might wish to consider, but those did not reach the company until after Second Reading.
It therefore cannot be said that, in the period leading up to the proceedings on the Bill, the action group was like Blucher rushing towards the field of Waterloo. By 15 May, two anomalies had been submitted; by 25 June, 80 had been supplied; and I understand that, by yesterday, there were 200. The number is accelerating, and I have no doubt that Lloyds TSB will have a lot to look at by the end of September.
The Hill Samuel action group said that it had written to its members on 11 May because Lloyds TSB would not take action itself. However, to be fair to Lloyds TSB,


in the concession letter, with reference to what was agreed with my hon. Friends the Members for Arundel and South Downs and for Aldershot, it said:
We agreed that the HSAG"—
that is, the Hill Samuel action group—
would be asked to write to its members requesting those who consider there to have been anomalies in their treatment, to write to a designated person at Lloyds TSB setting out full details of their concerns.
So the basis of the concession letter was reasonably straightforward.
Lloyds TSB had a lot to do in sending circulars to everybody, and by 15 May it was
finalising our communications programme to 180,000 members of the pension schemes within the Lloyds TSB Group".
I am going over ground that the hon. Member for Barnsley, Central sketched. Over the next month or so, the bank said, it would
be communicating with pensioners through the Group pensioner magazine Stable Companion, to members of staff through the staff magazine Frontrunner, and to deferred pensioners with their annual statements which are due to be dispatched shortly.
I find that quite a comprehensive programme to have mounted in 60 days.

Mr. Cousins: I should like to be clear in my mind what the right hon. Gentleman is saying. I accept that again, as on 20 April, assurances are being given by Conservative Members, no doubt in perfectly good faith—but not on behalf of Lloyds TSB itself. Is the right hon. Gentleman telling us that Lloyds TSB will circulate all its pensioners, produce the guidelines by the middle of August, and, if the guidelines are not produced by that time, the 30 September date will be suspended—and that, in any event, if people come to light after 30 September, their cases will be individually dealt with in good faith?

Mr. Brooke: As always happens with such a Bill, the only person who can give an assurance on behalf of the promoters of the Bill is the hon. Member who is handling it. However, I, like various other hon. Members in the Chamber tonight, including the hon. Member for Newcastle upon Tyne, Central, who has been assiduous in his attention to the issue, have been involved in quite a lot of hard work on behalf of people who have written to us—a fair number have written to me—and in terms of conversations with the bank.
In the end, we have to make our best judgment of what will occur. In the specific terms of the question that the hon. Gentleman has asked me, the sending of circulars has already occurred; as I said, it was foreseen on 15 May. I also said that my own reading was that, if the guidelines were delayed beyond the middle of August, the 30 September deadline would slip.

Mr. Illsley: On behalf of the promoters, I can give an assurance in the terms outlined by my hon. Friend the Member for Newcastle upon Tyne, Central.

Mr. Brooke: I am extremely grateful to the hon. Gentleman for that intervention. Interventions are not

always those that one would have sought, but the hon. Gentleman's intervention on this occasion was almost divine.
I shall now deal briefly with the deferred pensioner trustee. I received the first letter on this subject on 23 March from a constituent of mine who was once a household name in corporate finance. He wrote me a long and reasoned letter, including the words:
Our primary concerns are (1) to (4)",
after which he listed four concerns. He was writing on behalf of the action group, and, at that time, his primary concerns did not include a deferred pensioner trustee.
Therefore, the conversation that my hon. Friend the Member for Arundel and South Downs had with Lloyds TSB on the day of Second Reading, which produced a suggestion by Lloyds TSB that it would consider the appointment of a deferred pensioner trustee, was somewhat incidental. It was part of the lubrication that I have mentioned, but it was not a central part of the Hill Samuel action group's original proposals.
I finish with a further quotation from my constituent, who wrote to me on 5 May:
It is a very good scheme, and well run: but inevitably with the benefit of hindsight, some people are not properly covered—and they are often the ones who don't like to complain.
That, and our concern about such people, is exactly the issue with which many hon. Members have been engaged in our debates.
As I said earlier, with the hon. Member for Twickenham, I played a fulcrum role. Indeed, I took longer to remove my block than he did his. I am now satisfied that the company will honour its obligations. For what it is worth, despite my role in the blocking motion, I am, as I said on Second Reading, the Member of Parliament for the constituency in which the headquarters of the institution are situated. In that capacity, I shall myself be concerned that the commitments be met, and I would be astonished—not least in view of the amount of coverage that the events have had over the two debates—if a bank of such a standing did not meet those commitments in a manner of which all of us who have taken part in the debates can be proud.

Mr. Geoffrey Clifton-Brown: I did not intend to speak in the debate, but I rise because a number of anomalies need to be clarified. A number of my constituents—concerned pensioners of the Hill Samuel group—wrote to me, so I added my name to the blocking motion. I did my duty by my constituents: I met Mr. Fairey, the deputy chief executive of the Lloyds TSB group, to seek a number of assurances.
The law on pensions—this has not been mentioned tonight—is one of the most complicated areas of the financial services industry. The Pensions Law Review Committee, whose findings eventually led to the Pensions Act 1995, examined in huge detail the ownership of surpluses in pension funds. Having heard and reviewed a huge amount of complicated evidence, Professor Goode, the chairman of the committee, concluded that a pension fund surplus belonged exclusively neither to the pensioners nor to the employers who had contributed to the fund—it belonged to them both jointly. Trustee deeds show what the trustees are allowed to do in each individual pension scheme.
Mention has been made of the pre-1975 pensioners who were in schemes for fewer than five years and so did not qualify for a pension. The law was changed in 1975 by the then Government to entitle those who had served for fewer than five years to a pension, but that did not apply retrospectively. Indeed, I believe that it would have been improper for the trustees to apply that decision retrospectively; if they had, the matter could have been subject to judicial review.
Ever since I have been a Member of Parliament, I have had to deal with cases in which constituents have asked me, after pension law has changed, to request the Government to apply the new law to the state pension scheme retrospectively; in each case, the Government—of whatever colour—have refused to do so.
Interestingly, the Hill Samuel pensioners did not complain when their pensions were taken over by the TSB group, as the reserves of the TSB pension scheme were substantially larger than those of the Hill Samuel scheme. Only now that the TSB pension scheme is being taken over by Lloyds, whose pension scheme has fewer reserves, have the complaints begun to emerge. However, as far as I am aware, those complaints are being made by only 200 or so members of the Hill Samuel action group out of the tens of thousands in the combined TSB and Lloyds scheme. Although the case of even one pensioner who is in any way deprived should be considered, the trustees have a duty to act in the interests of all their pensioners.
The matter of low-income pensioners is far from simple. Someone who has served a similar length of service on a similar salary may seem to be entitled to a similar pension, but that person may have taken a lump sum on retirement, which would considerably affect the payable pension. Alternatively, someone may have retired at an earlier age than someone else who had served a similar length of service; again, that would affect the pension that was eventually payable.
I have investigated this complicated matter at some considerable length—I have corresponded with my constituents and with Mr. Fairey—and I believe that a reasonable balance must be struck between the interests of those pensioners who may be affected and the interests of the pensioners as a whole and of the shareholders. I do not think that the Bill will adversely affect any pensioner over and above what they might have expected in any case under the law of the land.
I have asked Mr. Fairey, the deputy chief executive of the Lloyds TSB group, to examine in particular the case of my constituent Mr. Jones-Bateman, who was a regional director of the Hill Samuel group. Mr. Fairey has full details of the case, and he has undertaken to consider it sympathetically and in detail—I have no doubt that he will keep his word. On the basis of my investigations, I am satisfied that a fair balance has been struck between all the different pensioner groups that are affected by the merger, so I shall not vote against the Bill.

Mr. Illsley: With the leave of the House, Mr. Deputy Speaker, I shall respond briefly to an interesting debate. As on Second Reading, there have been some remarkable contributions, and we have heard some excellent tours de force on pensions law and pensions issues. They did not much relate to what is in the Bill, but they were interesting all the same.
I am grateful to the right hon. Member for Cities of London and Westminster (Mr. Brooke) and the hon. Members for Arundel and South Downs (Mr. Flight) and for Cotswold (Mr. Clifton-Brown) who originally blocked the Bill, but have withdrawn their blocking motions and favour progress of the Bill. As the hon. Member for Cotswold said, pensions law has been dealt with by the Goode committee, which dwelt at length on the ownership of surpluses. The hon. Member for South Holland and The Deepings (Mr. Hayes) made the same point. It is a complicated area, but it is not within the remit of the Bill. Perhaps there should be a debate in future, but, the matter having been so recently addressed by the Goode committee, it may be some time before pensions law is further amended.
Let me tell the hon. Member for New Forest, West (Mr. Swayne) that the Bill's purpose is to facilitate the merger that took place two or three years ago between Lloyds and the TSB. All the pensions issues that we have discussed fall outside the Bill. There are anomalies, and there are lower-paid pensioners, but every member of the scheme is being paid his or her entitlement. The bank has given repeated assurances that those issues will be addressed.
My hon. Friends the Members for Newcastle upon Tyne, Central (Mr. Cousins) and for Knowsley, South (Mr. O'Hara) have asked why it is taking so long for the Inland Revenue and Lloyds to reach agreement, but, as the hon. Member for Cotswold said, there are many different reasons why pensioners have low entitlements. Under the TSB scheme, pensioners were obliged to take 50 per cent. of their pensions as a lump sum. That reduced on-going payments, which meant that those people were lower-paid.
The pre-1975 pensioners would have had contributions returned if they had been members for not longer than five years. That is another area in which there will be no payment, and it has come to light only during our debate. Every pension depends on length of service in the scheme, and final salary.

Mr. Swayne: Setting aside the anomalies, which I accept are not the subject matter of the Bill, can the hon. Gentleman say what the consequences would be for the merger if the Bill were lost tonight?

Mr. Illsley: Lloyds and TSB would have to find a different way to do business in future. The reason for the Bill, as with any bank Bill, is to facilitate the merger without the bank's having to take into account the wishes and views of every account holder and customer, which would be impossible, as there are several million of them. It would be an extremely heavy burden on the banks if they were asked to contact every member for permission for the merger.
I have answered the point made by the hon. Member for Gainsborough (Mr. Leigh) about different categories of people whose pensionable service will have left them with a low-paying pension. Lloyds has addressed that issue. I am not sure whether the hon. Gentleman was in the Chamber when I assured the right hon. Member for Cities of London and Westminster that guidelines will be produced shortly. I hope that the 30 September deadline will be flexible, and that the issues will be addressed.
I take on board the points made by the hon. Member for Twickenham (Dr. Cable) who made a comparison with the coal industry's pensions schemes, but that issue relates to the Goode committee and pensions law, and it falls slightly outside the remit of the Bill.
After a longer debate than I had expected, and after considerable debate on Second Reading, I hope that hon. Members will give the Bill a fair wind, and a Third Reading, without the need for a Division.

Question put and agreed to.

Bill read the Third time, and passed.

National Minimum Wage Bill

Lords amendments again considered.

Clause 2

DETERMINATION OF HOURLY RATE OF REMUNERATION

Lords amendment: No. 2, in page 2, line 11, leave out ("and times at which,") and insert
("times at which, or the time for which,").

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss Lords amendments Nos. 3 and 4.

Mr. McCartney: The amendments deal with a specific technicality, which became apparent following the Low Pay Commission's recommendations and initial work on drafting the regulations. The general effect of the three amendments is to extend slightly the flexibility of the power to calculate the rate. We want to be absolutely confident that the clause provides us with the power that we need to deliver through the regulations what the Low Pay Commission has recommended regarding the treatment of home workers who are paid by the piece.
Let me remind the House how clause 2 works. Hon. Members should note that it deals with the determination of the hourly rate of remuneration. The clause was drafted flexibly to enable us to reflect, as far as could be envisaged, whatever the Low Pay Commission might recommend in its report regarding the calculation of the hourly rate for national minimum wage purposes. Basically, it is a technical clause, but one which is important to the flexible operation of the Bill. It provides the flexibility for a wide range of possible permutations in determining what elements of pay can be included or excluded—for example, overtime, bonuses, benefits and holiday pay. It enables a wide range of working situations to be taken into account, including piece work, payment of standard wages at a regular rate and payments on commission or at different rates over different periods.
Since receiving the report, we have been considering the practicalities of putting into effect the Low Pay Commission's recommendations. In particular, we have been considering those workers who work away from the office and are paid by output, rather than time worked. For that particular case, it has become apparent that the clause may not be quite flexible enough. In particular, the commission's recommendations suggest that piece workers should be entitled to the hourly minimum wage for every hour worked regardless of the piece rate, and that employers of home workers should be able to demonstrate that piece rates have been evaluated to confirm compliance. The fairest and least bureaucratic way to do that is to ensure that there can be agreement between worker and employer about the maximum hours to be worked and the output expected. We need to ensure we have the vires to do that under clause 2. Therefore, we are proposing three amendments to the clause, the third of which is purely consequential.
Lords amendment No. 2 deals with subsection (3), which relates to how working time is to be treated for minimum wage purposes. The amendment ensures that the regulations can prescribe those times for which a worker can be treated as working. The amendment is a technical rewording to ensure that we have the vires to prescribe in regulations that, where piece workers work at home with no agreed hours, the worker and employer may together agree the maximum hours that are to be worked and claimed.
Lords amendment No. 3 deals with the same subsection and makes explicit the power to prescribe that an agreement may be reached regarding the maximum or minimum time that a person shall be treated as working. As with Lords amendment No. 2, that change is necessary in the case of the piece worker working at home with no present limit on the hours to be worked. In the interests of legal certainty, it ensures that we have sufficient flexibility to implement the Low Pay Commission's recommendations regarding piece workers and home workers through the regulations.
The clause was drafted flexibly, but needs to be supplemented by means of those technical amendments to ensure the practical implementation of the LPC's recommendations on piece workers working from home. I ask the House to support the amendments.

Mr. Boswell: I am grateful to the Minister for tabling the amendments and explaining them. Indeed, his explanation was consistent with—or almost precisely in the same terms as—that of his noble Friend and former colleague in another place. It is almost six months to the day since the Minister of State—who we are glad is still around to conclude these proceedings—my colleagues and I locked horns in a couple of momentous all-night sessions in detailed consideration of the Bill. The need for detailed consideration remains and it is right that we should study some of the amendments and not merely pass them on the nod. I do not want to agitate the hon. Gentleman unduly by suggesting that it will be necessary to continue our deliberations all night, although it is fair to say for the record—particularly as I suspect that my colleague from the Whips Office would want me to be shown to be earning my keep—that 32 of the 36 amendments under consideration emanate from the Government.
The whole message of the Bill has been that, although the concepts have been relatively simply, the devil is inevitably in the detail and it is extremely important, in the interests of employers and their employees and of the Government and Ministers, that they get it as right as is humanly possible.
That brings me to consideration of the amendments. I shall not advise my hon. Friends to object to them, unless a new point arises beyond what the Minister has said. First, I am slightly concerned in one respect about what the Minister said and what his noble Friend said in another place. The Minister emphasised that the amendments provide greater flexibility. That is entirely consistent with the arguments for flexibility that my hon. Friends and I were advancing throughout the Committee proceedings. I do not understand from the Minister's explanation in which direction the flexibility will operate. He said in response to the Low Pay Commission that piece workers should be entitled to the hourly minimum wage for every hour worked, regardless of the piece rate,

and that employers of home workers should be able to demonstrate that piece rates had been evaluated to confirm compliance. He said that that would have to be achieved by agreement between employers and piece workers.
Agreement might be reached, but what would happen if the agreement did not coincide with the facts? For example, piece workers might work all the hours that they claimed to have worked but not produce the number of pieces that they agreed to produce. Conversely, piece workers might turn out more pieces than had been agreed but not receive greater remuneration. There are potential problems in those cases.
I take it that the Minister is saying that, in the interests of legal knock for knock, there should be a functional arrangement and the two parties should come to an agreement. I do not object to that in principle, although, given the points that the Minister made so vigorously in response to my right hon. Friend the Member for Wokingham (Mr. Redwood) about the lot of piece workers—I share some of the Minister's concern for their position—it is not always clear that such an agreement would be made on all fours between equal parties. I presume that the amendments concern a privilege that the Minister will want to monitor carefully.
My second concern for the House is that the proposal for a more flexible agreement needs to be considered alongside the provisions for what might loosely be termed the normal cases of employers and employees who are paid by the hour, week or month. The Low Pay Commission, whose report we did not have in our deliberations in Committee, considered all those points carefully. It came to a conclusion on the pay reference period that the Minister said is highly technical, but which exercised us because of the potential for error. The commission's recommendation is that
the averaging period for the National Minimum Wage should be the normal pay period, as agreed between worker and employer"—
so the element of agreement is included—
up to a maximum of one calendar month. We believe this is long enough to capture most fluctuations in earnings.
The report goes on to say that there could be a case for low-paid workers who are covered by annualised hours arrangements. For the sake of completeness, I remind the House of the point that I made about my employee who works on my farm. He is salaried and receives an even rate whether he works for long hours during harvest or for shorter periods in the middle of winter. The commission's recommendation for a one-month maximum could lead to average hourly pay for employees working the longer hours pattern falling below the national minimum wage. The commission recognises that
in such circumstances employers and workers may need to …restructure their pay systems.
That precisely encapsulates the concern which we expressed in Committee that, for all the efforts to reproduce the flexibility and complexity of economic arrangements and systems for the payment of remuneration in this country, inevitably, the introduction of the national minimum wage would create a need for some systems to be changed, even if they were the most sensible form of payment for the parties concerned.
In concluding my remarks on the clutch of amendments before us, I tell the Minister that I may not need to intervene on all the groups of amendments, but I wish to raise several points on later groups.
We understand that home workers are an especially sensitive group. We understand that piece workers—who are not necessarily exactly the same as home workers but have some similarities—will need to be given some flexibility in working out their pay in relation to their output and the number of hours worked, and thereby in working out whether the employer or the employment arrangement complies with the national minimum wage. However, that requirement must not provide an inside track, giving those workers a privileged flexibility that is not available to other, perfectly reasonable, employers and employees who wish to make arrangements that are consistent with the spirit of the Bill.
In a sense, one vital card is still unplayed; until the Bill becomes an Act and for a time afterwards, the Minister will be unable to give us draft regulations to explain how matters will be dealt with in the normal case. Only then shall we get flesh on the bones of other situations and know whether the provisions are sensible and flexible enough.
It is right to put down those markers now. Obviously, they have nothing to do with the principle of the Bill, but they are designed to ensure that it operates fairly. I would welcome the Minister's response.

Mr. Chidgey: I am sure that the Minister would agree that the amendments—which I am sure are eminently sensible—try, to a degree, to clarify what we mean by "working time". I therefore ask him to clarify a specific point.
Shortly, legislation implementing the working time directive will come before the House. I should like the Minister, if he can, to clarify whether subsequent legislation on the working time directive will use the definition of "working time" used in the Bill, or whether we may have two definitions in two pieces of legislation.

Mr. Ian McCartney: I thank the hon. Member for Daventry (Mr. Boswell) for his kind remarks. I thank him also because I understand that he petitioned the Prime Minister to ask for me to remain in this job—as did the Confederation of British Industry, the Institute of Directors and the Federation of Small Businesses. They are all behind me. The hon. Gentleman's personal warmth and appreciation of my being here is taken in the spirit in which it was intended. The hon. Gentleman and I have spent a considerable part of the last year of our lives dealing with these issues. In Committee and on the Floor of the House—despite our sometimes rumbustious debates—I have welcomed the fact that he has often been more than fair in the way in which he has drawn attention to issues. The questions that he asked tonight were well made and well intended.
The agreement would concern the hours worked and to be claimed; it would not be about the rate, because the rate will be effected in regulations. We are trying to ensure that there is some capacity for the employer, at the outset of the work to be carried out, to have an agreement with the worker that gives some clarity about the hours and the nature of the work to be carried out within a time scale. That is important because, if we are to give—as we shall do—the right to be paid the minimum wage for all hours worked, it is important that the employer does not

have an open-ended arrangement by which someone gets paid for 13 hours' work when there is only two hours' work to be done.
It is important that flexibility works in two ways. There must be good practice, which is not always the case with piece workers or home workers. Employers may turn up and say, "Here is the work to be done; we will come back in the morning and, if it is not completed, we may or may not pay you the following rate." The legislation will ensure good practice and it will mean that the employer must reach an agreement with the employee at the outset about the nature of the work and the hours of work. That will protect the employer from a totally open-ended commitment and from having to pay for work that was not done.
It will also create some clarity for the employee, who will have an absolute guarantee of receiving at least the national minimum wage. It may mean a different calculation at the end of the reference period. For example, if a worker is entitled to be paid £3.60 an hour and, at the end of the agreed reference period, the piece work is calculated at £3 an hour, the employer must make it up to £3.60 in order to ensure compliance with the minimum wage. It is important that the proposals before us are approved in order to introduce some certainty into the system.
The hon. Member for Daventry asked what would happen if there was disagreement about the work to be done and the duration of that work. That is a matter for dispute resolution; it is not a matter for these regulations. It is a matter of employment practice between the employer and the employee. I hope that that hon. Gentleman will accept that that is the Government's intention in that regard.
It is intended that the introduction of both the national minimum wage and the working time directive will impose minimum burdens on business and that they will be enforced effectively. They will be matched as closely as possible, but they do not always measure the same thing. Time worked for health and safety reasons is different from the calculation of time for pay purposes. There may be differences in some cases when considering hours worked for national minimum wage purposes. As far as possible, we shall ensure that the minimum wage and the directive match. However, different issues must clearly be catered for.

Mr. Chidgey: I acknowledge the Minister's answer—I have probably thrown him a bit of a googly, and I accept that he is doing his best. Does he accept that, with the forthcoming working directive and the minimum wage legislation, employers and employees could have difficulty in trying to meet different requirements for measuring working time?

Mr. McCartney: I have said clearly that we have conducted extensive consultation on the working time directive. It deals with two issues. The first is health and safety and how we can make sure that entitlements under legislation dealing with health and safety in the workplace are calculated for the purposes of ensuring compliance. The second issue relates to ensuring that people do not suffer any detriment when claiming their rights under the working time directive. There are two regimes within the directive: the first ensures that health and safety


standards are maintained or improved, and the second ensures that no employee is sacked or suffers some form of discipline for clearly exercising his or her rights under the directive.
The hon. Member for Eastleigh (Mr. Chidgey) raises a simple matter. We cannot consider health and safety matters in the same way we consider whether someone has received the proper minimum wage for the hours worked. For example, under the working time directive, employers will be required to keep records in order to ensure that night-time workers are not forced to work more than the number of hours set out over the reference period. In addition, the employer will be required to ensure that medical checks and health assessments are carried out from time to time to make sure that the employees' working hours are not detrimental to their health. We are measuring different things and the regulations will be applied differently. That is the sensible way to approach the issue.
The hon. Member for Eastleigh has not really thrown me a googly. That is rather a nice English phrase. It is not a phrase that you, Mr. Deputy Speaker, or I, would recognise from Glasgow. Other phrases would go well with it, but I shall leave them for another day. However, I get the hon. Gentleman's point. When the Bill is enacted, we will move as quickly as we can to put into the public domain the draft regulations and the consultation. I welcome the opportunity for participation that that will give Conservative Members. It is important to us, as it is to anyone in favour of the minimum wage, to ensure that the regulations work effectively and that employers realise that they are not burdensome while allowing proper compliance with the legislation.

Lords amendment agreed to.

Lords amendments Nos. 3 and 4 agreed to.

Lords amendments Nos. 5 to 7 disagreed to.

Clause 11

FAILURE OE EMPLOYER TO ALLOW ACCESS TO RECORDS

Lords amendment: No. 8, in page 8, line 36, leave out ("subsection") and insert ("subsections (8) and")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.
This is a technical amendment made on Third Reading in the other place to complete and improve the Bill. It came to our attention only at that late stage, for which I apologise, but such things are inevitable on occasion.
The amendment affects clause 11(1)(a), which provides a justified ground for complaint about access to records if the employer has
failed to produce some or all of the relevant records in accordance with subsection (9) of section 10 above".
Clause 10(9) sets deadlines for the time within which records must be produced. Failure by the employer to meet the requirement therefore provides ground for complaint.
Counsel has noted that subsection (8) is also a requirement-setting provision, stipulating the place where records must be produced. However, failure to produce records at one of the places specified is not currently included in clause 11(1)(a). The reference there is only to

subsection (9), not also to subsection (8). In other words, there is an omission because the Bill creates two requirements but provides a remedy against only one of them.
The amendment therefore adds a reference to clause 10(8); and I ask the House to support it.

Mr. Boswell: I read with some interest the debates in the other place on the keeping of records. In the spirit of the Minister's conciliatory remarks a moment ago, we recognise that he wishes to consult on the details and that there will be proper consultation on the record requirements themselves. We welcome that and hope that industry and, if necessary, hon. Members will participate in it.
One other point before I come to the specific amendment is a touch more critical, but we recognise the pressures under which Ministers and officials are working at this time of year. In preparing for today's debate, I noted a number of references in the other place to correspondence with my noble Friend Baroness Miller on certain technical aspects. That correspondence has not been vouchsafed to Conservative Members or to me, and I should be grateful if it were in due course.

Mr. McCartney: I offer my apologies to both the hon. Gentleman and the hon. Member for Eastleigh (Mr. Chidgey). I have always had a process of maintaining correspondence and meetings. It is an oversight, and I take responsibility for it. I shall ensure that copies of the correspondence are sent to the hon. Gentleman and that I respond to any additional item that he raises this evening to which I do not have an immediate answer.

Mr. Boswell: I readily respond with thanks to the Minister of State because he is, as ever in these matters, most generous and helpful.
We are dealing with the production of records and I have the impression that, even if the Minister does not have the style, he would rather like to join me in playing around at being an amateur lawyer. He explained the draftsman's thought process extremely eloquently. However, we should pause for a moment to ask whether there really is a failure to deliver the records at a particular place. The records must exist, unless they have been wilfully destroyed. The offence arises from the inability to deliver within a particular time the records to the worker who has requested them.
If there is a "failure of place"—the point that the tidy-minded draftsman has tried to pick up—and the records are not offered in the worker's place of work or any other reasonable place, or such place as may be agreed between the worker and the employer, the records will not have been produced at all. They exist, but they have not been made available. I do not argue that that provision should not be in the Bill, but perhaps the draftsman's first instincts were better than his second, because the important point is that the records should be practicably available to the worker within a reasonable time.
The fact that, for information, the Bill suggests a number of places where the records could be produced does not by itself create an offence because if they are not produced in one of those entirely sensible places, I doubt


whether they have been produced at all. Of course, they still exist, but records are of no use to a worker who wants to see them if they are sitting in somebody's filing cabinet or have been hidden behind the mantlepiece.
This is not a matter over which we should go to the stake. My instinct may be wrong, in which case there is no need to make a fuss about the matter. However, it is at least worth pausing to think about it.

Mr. Philip Hammond: I, too, am delighted to see the Minister in his place. I awaited tonight's debate with trepidation in case he were not there because it would seem inappropriate if, after six months or so, we were to discuss the Bill without seeing his familiar face.
I find it surprising that, given the extensive work that was done in Committee, we have not discussed this point before. I heard what the Minister and my hon. Friend the Member for Daventry (Mr. Boswell) said. My hon. Friend referred to the possibility of records having been wilfully destroyed or concealed. Will the Minister assure us that, in dealing with a complaint under this clause, an employer could defend himself by pleading that the records had been inadvertently destroyed or were unavailable as a result of accidental destruction?

Mr. McCartney: I did not catch the hon. Gentleman's last question. Will he repeat it, so that I do not forget to answer it?

Mr. Hammond: I shall gladly repeat it. I should like to be reassured that, under the clause, it would be a defence that the records had been inadvertently destroyed as opposed to wilfully destroyed or concealed. My hon. Friend the Member for Daventry referred to the wilful destruction of records, but records could have been inadvertently destroyed, or destroyed by fire or some other form of misadventure.
Another point was discussed in Committee and I am disappointed that the Minister has not taken the opportunity of the Bill's consideration in another place to correct it. There is a lack of symmetry between the requirement on employers, and the need for some employees, to produce and keep records. To an extent, we are going over old ground, but this is an important point that is not in any sense intended to undermine the principles of the Bill. There will be occasions, especially in relation to piece work, on which the employer will be unable to defend himself against a claim that he has failed to pay the minimum wage unless the employee has kept appropriate records in his workplace, which may be his home.

Mr. Boswell: It is nice to have my hon. Friend back in our deliberations. Does he recall the sensitive issue of spouses who may disagree? The employer—the husband, typically—may be required to keep records, but a disaffected spouse may assert that such records have not been kept or that the hours worked in a family business were much longer than he is prepared to concede.

Mr. Hammond: My hon. Friend is absolutely right. As he knows, I have argued throughout consideration of

the Bill that, whatever else may be right or wrong, it is clearly wrong to bring businesses that are effectively husband-and-wife operations within its remit. That would bring the full force of the law into the everyday relationship between a husband and wife who operate a small business together.
My specific point to the Minister is that there is no requirement for employees to keep appropriate records. What defence would an employer have if he were faced with the claim that he had failed to pay the minimum wage in respect of the number of hours worked by a piece worker in his own home when producing a certain amount of work? How would such an employer prove that the claim was not valid if he had no power to require the employee to produce records of the hours that had been worked?

Mr. Bercow: My hon. Friend is making a powerful case. Given that many self-employed people keep and provide records to the people for whom they work as a condition of their payment, does he agree that there can be no reasonable objection under the Bill to requiring them to do precisely that in future?

Mr. Hammond: My hon. Friend is precisely right. It would not be at all onerous for employees to keep simple records, where appropriate. That would not be appropriate for an employee who clocks on when he arrives at the factory, does his day's work and goes home. In such circumstances, it is appropriate that the whole burden of record keeping falls on the employer, but it was common ground in Committee that the difficult cases will arise in situations other than the conventional employment situation in which work is done in the employer's workplace.

Mr. John Hayes: My hon. Friend's point is made more profound because flexible working—home work and distance work—is on the increase and likely to grow, not diminish. The traditional model of the workplace is not disappearing, but it is becoming less common.

Mr. Hammond: My hon. Friend is entirely correct. I am asking the Minister not to impose some additional and unreasonable burden on employees, but to say why he has not considered it appropriate, in suitable cases where it is relevant, to require employees to keep relevant records and to give employers the right to see those records so that they can defend themselves against claims.

Mr. Ian McCartney: I welcome the hon. Member for Runnymede and Weybridge (Mr. Hammond) to the debate. I understand that he has been promoted to the Front Bench since we debated the minimum wage in Committee, so attempting to hold me up for all those hours has worked well for him. I do not want to overexcite him by going through that process again, but I hope that he gets a further leg up the greasy pole. We are not really discussing the amendments, which are about plugging a little technical gap in the Bill. I must tell him that the Bill is clear—the employer has a duty to keep records.
The hon. Member for Daventry (Mr. Boswell) said that he and I might like to be amateur lawyers; indeed, many people may say that one of us, at least, has been a barrack-room lawyer on occasion—or even a Philadelphia


lawyer. It does not take a lawyer to get the point made by the hon. Member for Runnymede and Weybridge, and I cannot give any succour in that regard. It is a pretty weak excuse to say, "I inadvertently got drunk last night and drove the car home and smashed it up". Equally, it is a pretty weak excuse to say, "I inadvertently burnt all my records, and it is therefore impossible for me to establish whether I paid my home workers the national minimum wage". We cannot allow a coach and horses to be driven through the principle of employers' duty to maintain good records.

Mr.Boswell: Even if the Minister did not climb the greasy pole, we are glad to see him in his place.
The Minister, perhaps typically, chooses the delinquent employer as his example, but is there not an equally serious problem? I refer to the employer who acts in good faith, but whose records may have been destroyed. Surely the regulations must provide for a workable distinction between the two.

McCartney: No doubt genuine accidents happen. No doubt places are burnt down in such circumstances. I am sure that Inland Revenue representatives and VAT men are tearing their hair out every week when they visit premises that may have been inadvertently burnt down, or burnt down in entirely innocent circumstances—or, occasionally, even burnt down as a result of an attack. I am sure that such one-off incidents will be seen for what they are, but we are not talking about that; we are talking about compliance with a requirement for good record-keeping, which must be an employer's defence against any unfair, unacceptable or unsubstantiated allegation of non-payment.
The worker's right of access to records, and clauses 9, 10 and 11, are very important. The amendments are not about the principle of the clauses; they are technical.
In the Bill, we decided that the burden of proof should be on the employer. That is important, especially given the inability of low-paid workers—home workers, for instance—to establish a balanced arrangement. That was a principled decision by the Government, and it has been accepted in good faith by employers during our debates on the Bill. I therefore ask the House to accept the amendments, on the basis of their technical nature.

Lords amendment agreed to

Clause 13

APPOINTMENT OF OFFICERS

Lords amendment: No. 9, in page 10, line 2, after first ("any") insert
Minister of the Crown or")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 10, 12 to 16, 32, 33 and 35.

Mr. McCartney: The amendments concern ministerial transactions relating to information obtained. They are

essentially technical, and are designed to maintain the status quo in respect of the enforcement arrangements envisaged in the Bill. Their purpose is to ensure the continuation of the policy to leave open the option of appointing agricultural wages inspectors in England, Wales, Scotland and Northern Ireland to enforce the minimum wage specifically in the agriculture sector. If the amendments were not made, that option would be closed in relation to agricultural wages inspectors in Scotland.
We had considerable discussion in Committee about the interface between agricultural wages and the minimum wage, and agreement was established. We simply want to get the technicalities right.

Mr. Boswell: I want to accept the Minister's assurances, but I should like to be clear about one point. I understand that, when records are compiled for one purpose, for example for the purpose of the agricultural wages inspectorate—as the Minister will know, I am familiar with such operations—they remain the records of that inspectorate, and are available for its purpose. For the purposes of the legislation, they are, if I may produce a non-legal term, transferred to the minimum wage legislation to determine whether that has been complied with. The Minister spoke about agricultural wages legislation in Scotland. Was the case that he quoted an example or is he trying to cover the whole class with this sheaf of amendments?

Mr. McCartney: The hon. Gentleman is right about the proposals. The amendments will secure the correct interface in England, Wales, Scotland and Northern Ireland, and ensure a smooth operation between the two arrangements for agricultural wages and the minimum wage.

Mr. Geoffrey Clifton-Brown(Cotswold): Perhaps the Minister would clarify one point. I declare an interest, as recorded in the Register of Members' Interests, in agriculture. It is increasingly likely that farmers will pay their workers in euros in future, particularly if payments from Brussels to farmers are in euros. How will the Minister interpret the legislation in relation to euros?

Mr. Deputy Speaker: Order. Perhaps the hon. Gentleman will write to the Minister. His question has nothing to do with the amendment.

Lords amendment agreed to.

Lords amendment No. 10 agreed to.

CLAUSE 15

INFORMATION OBTAINED BY OFFICERS

Lords amendment: No. 11, in page 11, line 36, at end insert—
("(6A) Subsection (2) above does not affect the title or rights of—

(a) any person whose property the information was immediately before it was obtained as mentioned in subsection (1) above; or
(b) any person claiming title or rights through or under such a person otherwise than by virtue of any power conferred by or under this Act.")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.


The amendment touches on what the hon. Member for Daventry (Mr. Boswell) alluded to on an earlier amendment. I thank him for co-operating with us on this matter.
The amendment is technical, and it affects clause 15(2) which deals with information exchange. The subsection provides that information that is covered by the clause is vested in the Secretary of State. The information in question is that which an enforcement officer has obtained, for example, from an employer or worker about working hours or pay.
The current formulation of clause 15(2) might be taken to affect the rights and title of other owners of that information. The amendment makes it clear that the vesting of the information in the Secretary of State for this purpose does not affect others with the title or rights to the information. That is to say, the ownership of the information does not change hands: it is exchanged only for the purposes of the minimum wage legislation. I hope that the amendment clarifies the facility in clause 15.

Mr. Boswell: I have one short question. If information is disclosed by the inspectorate or by the Secretary of State in an unauthorised way that is outwith the purposes of the statute—I do not suggest that that will occur, but accidents happen—will the office that is responsible for the disclosure, if it gives rise to legal action or a claim for damages, bear the cost even if the information is jointly owned by the two parties?

Mr. McCartney: The hon. Gentleman makes an interesting debating point and I shall reflect on what he has said. The purpose of the measure is to ensure clarity in the process of obtaining information, the purposes of the information, who can use it and who has good title to it. If the clause is operated effectively, the issue that the hon. Gentleman raises should not arise. However, the point is well made and I shall ensure in discussions and by regulation that there is good professional practice in all those matters.

Mr. Hammond: I welcome the amendment, which clearly improves the clause. The Minister may recall that in Committee we had a heated debate about precisely this matter. He assured us that, as the clause was originally drafted, there would be no doubt about who had title to the intellectual property in the information to be transferred. He rubbished our arguments, so I am pleased that he has had second thoughts. The provision will be welcomed, if only for the avoidance of doubt.
Will the Minister clarify whether the provision will give any additional cause of action to an employer who finds that information has been wrongly used and has been transferred outwith the provisions of the Bill? The clause provides that "any relevant authority" that obtains the information may use it
for any purpose relating to this Act.
Should officials of the Inland Revenue or of Customs and Excise be empowered to collect information for the purposes of the legislation, their organisations would have to have Chinese walls
.

On the face of it, the amendment would strengthen the position of the rightful owner of the information—the employer who had the information. Will the Minister confirm for the record that that would give the employer an additional cause of action or additional security?

Mr. Ian McCartney: I do not remember having a row on this matter. It must have been one of those early morning activities, so I apologise. I shall not go over ground that I cannot remember.
I was probably robust with the hon. Gentleman because it was never our intention that the clause would change the ownership of the information. The Bill sets down clearly the purpose for which the information can be used and who is responsible for it. Any action taken that is outside the scope of the legislation would be outside the employer's legal powers. I have no doubt that there would be a remedy in those circumstances. I am trying to clarify the position—to put it in an armlock—to ensure that the original intention of the clause is absolutely clear.

Mr. Hammond: I thank the Minister for that reply. May I press him on a further point? Information may be wrongfully supplied to another agency or used by an agency that had lawfully obtained it for a purpose beyond the scope of the Bill. Is it correct that such information could not be produced in court as evidence?

Mr. McCartney: That is a hypothetical case. I have made it absolutely clear that, under the Bill, information can be used only for the purposes of the national minimum wage. Anyone who used it in any other way would be acting outside the scope of the Bill and would be exceeding his powers. The answer that I gave a few moments ago is the same as the answer that I am giving the hon. Gentleman now.

Lords amendment agreed to.

Lords amendments Nos. 12 to 16 agreed to.

Clause 19

POWER OF OFFICER TO ISSUE ENFORCEMENT NOTICE

Lords amendment: No. 17, in page 14, line 21, at end insert—
("(9) The powers of an employment tribunal in allowing an appeal in a case where subsection (8) above applies shall include power to rectify, as the tribunal may consider appropriate in consequence of its decision on the appeal, any penalty notice which has been served under section 21 below in respect of the enforcement notice.
(10) Where a penalty notice is rectified under subsection (9) above, it shall have effect as if it had originally been served as so rectified.")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.
The purpose is to cut unnecessary red tape, and to prevent enforcement from being weakened in a particular area. Currently, under clause 19(8), an employment tribunal has the power to correct an enforcement notice on appeal, for example if the officer got the amount of the national minimum wage underpayment wrong but an underpayment nevertheless remained due.
The tribunal may also correct the subsequent penalty notice, which can be issued pending an appeal against the enforcement notice under clause 22(5). There is a technical difficulty—without the amendment, the tribunal would have the power to correct the penalty notice only if a separate appeal against it had been lodged. Therefore, an employer would have to ensure that he made two appeals, on a just-in-case basis, against both the enforcement notice and the penalty notice.
The amendment would cut red tape by providing that, when an appeal against the enforcement notice was partially successful and the notice was corrected by the tribunal, the tribunal would have the power to correct the penalty notice accordingly, even in the absence of an appeal against the penalty notice. I hope that hon. Members will accept that the amendment is about ensuring—

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
That, at this day's sitting, the Northern Ireland (Sentences) Bill, the Crime and Disorder Bill [Lords] and the National Minimum Wage Bill may be proceeded with, though opposed, until any hour.—[Ms Bridget Prentice.]

Question agreed to.

Lords amendments again considered.

Question again proposed, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker: Does the Minister wish to continue?

Mr. McCartney: I am happy to sit down, Mr. Deputy Speaker.

Mr. Boswell: The Minister is trying to be helpful. I have a procedural question, which is whether arrangements will be made for the tribunal to ensure that there is in the papers a box to tick, or some other way to enter the fact that a penalty notice has been served, so that the tribunal may look at both automatically and simultaneously, rather than finding out by accident that a penalty notice has been served. We must remember that there are relatively unsophisticated employers who may not be aware of double jeopardy. Is the Minister nodding or is he reflecting on that point?

Mr. McCartney: I assure the hon. Gentleman that I will take on board what he has said. It is important in the good employment practice followed in these cases that we should make it as easy as possible for both the employer and the tribunal to ensure that such matters are covered.

Mr. Boswell: I am grateful to the Minister.
On the more general points, the Minister's explanation has been helpful, but I should like him again to confirm two matters. The first is that the enforcement notice and the appeal against it are free standing and that the penalty notice and the appeal against it are also free standing. They could happen separately. I have not quite thought

through the implications, but the tribunal could come to different conclusions in different cases. We need to ensure that no one's rights are removed.
The second matter relates to financial penalties for non-compliance. Although the tribunal will take an interest in the calculation—if that is brought to its attention because, for example, the employer says that the sums have been done wrongly—it is not empowered to rewrite the level of the penalty, other than for a mathematical mistake, if a liability has been imposed. Nor will it look at degrees of culpability as between employer and employee in reaching its conclusions.
While having regard to the worker's interests, these cases are very much ones where the employer will appeal against enforcement and, in particular, against the financial penalty. Clearly, the worker is enjoined in that and will want to have a say in it, but the case is very much about ensuring that the employer is treated fairly. The enforcement notice comes after due process, from either the employee or an officer acting on his behalf.
I am trying to get the flavour of the issue. The Minister has it broadly right, but it would be helpful if he could comment on it.

Mr. Ian McCartney: The answers to the hon. Gentleman's first two questions are yes and yes. On his third question, I think that he—not for wrong reasons—is rather overcomplicating the matter. If there has been an error, the tribunal will ensure that it is corrected.

Lords amendment agreed to.

Clause 23

THE RIGHT NOT TO SUFFER DETRIMENT

Lords amendment: No. 18, in page 16, line 40, after ("will") insert ("or might")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 21 and 22.

Mr. McCartney: When I started work on this Bill, I was 6 ft 6 in tall. I am told that I should just rest a bit on this Box.
This is an important group of amendments, the purpose of which is to ensure that there is no loophole in protection against dismissal or detrimental action for workers and employees who would be entitled to the full rate of the national minimum wage or who were about to qualify for a higher rate, even when no rate has yet been set in the months following commencement of the clauses.
I am sure that the House will agree on the principle behind the affected clauses. They will protect workers and employees against dismissal or detrimental action on the grounds that they qualify or will qualify for the national minimum wage or for a particular—higher—rate of the national minimum wage. We want to ensure that workers have that protection during the interim—between commencement of the clauses, after Royal Assent and subject to Parliament's will, and the setting of the national minimum wage in the ensuing regulations.
By adding the word "might" in each case, the amendments are designed to remove any doubt about whether workers are protected in that manner during that period. I trust that the House can accept these linked amendments.

Mr. Boswell: I think that we have to stop for a moment on this group of amendments. There is nothing wrong with the Minister's intentions, and I do not wish to suggest that we want people to take action by way of detriment against employees who in future
might qualify…for the minimum wage".
I have used the phrase that the Minister has included in his amendment, but, in so doing, I express some doubt about it.
Circumstances defined in the relevant clause—clause 23(1)(c)—include those in which
the worker qualifies, or will qualify, for the national minimum wage or for a particular rate".
That should be a fairly clear evidential test. Is there an employment when the wage is in force? Is the appropriate rate for the national minimum wage being paid? Is there an employment when the national minimum wage comes in on the appointed day after the conclusion of regulations? If so, is the person being sacked ahead of the introduction as a way of getting them out of the way? I understand those cases. However, insertion of the word "might" creates the types of uncertainty that the newspapers are so good at exploiting.
There could be a story saying, for example, who "might" today become Government Chief Whip. That is the type of story that the newspapers write. The Government "may be" having second thoughts about inclusion of the armed forces in the National Minimum Wage Bill. That story was spun around until there were second thoughts.
The word "might" is imprecise. I might have no employment relationship. As an hon. Member, I am self-employed, at least for some purposes, but I might qualify for the national minimum wage. I do not know whether I do. To use "might" is to open the doors to some uncertainty.
Although I have no particular penchant for drafting, I should have preferred as the test "either that the worker qualifies, or, provided that his current employment contract is maintained, he will qualify"—not "he might qualify". I am not sure that, in the interests of trying to be fair, the Minister has chosen the right wording. I wonder if he might reflect on the point.

Mr. McCartney: I have been reflecting on what the hon. Gentleman has said and I disagree with him. I know that that was a pretty quick reflection, but we debated at great length in Committee the importance of the principle of protecting people from being detrimentally affected during employment when they are entitled to the minimum wage, and of preventing an employer from sacking an employee who is coming up to the qualifying age for the minimum wage.
In the interim between Royal Assent and the application of the minimum wage, an employer should not be able to dismiss an employee or affect him or her

detrimentally. The word "might" is not imprecise. It relates to the period leading up to when people might qualify for the minimum wage and should be protected from an employer seeking to sack them to avoid paying the minimum wage. That would not be acceptable. We are being precise.

Mr. Hammond: My hon. Friend the Member for Daventry (Mr. Boswell) and I agree that in relation to the transitional period the use of the word "might" could be seen as precise. My hon. Friend was pointing out that, once the transitional period is over, the word becomes rather imprecise. Would it not have been better to deal with the problem by putting a specific transitional provision in the Bill?

Mr. McCartney: We could go round the houses on that. I think that we shall just have to disagree. I have made our reasons clear. The provision is for the transitional period leading up to the full implementation of the minimum wage. It will remove the loophole that would allow someone to be sacked on the basis that he might qualify for the minimum wage.

Lords amendment agreed to.

Lords amendment: No. 19, in page 17, line 2, after ("by") insert
(", or by virtue of, any provision of')

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendment No. 20, Lords amendment No. 25, Government amendment (a) thereto and Lords amendments Nos. 28 and 34.

Mr. McCartney: Amendments Nos. 19 and 20 are tidying up amendments aimed at ensuring consistency and correctness of drafting. Clause 23 protects workers against a detrimental action for asserting their right under the Bill. Amendment No. 19 adds the words "by virtue of in subsection (3)(a) to ensure that the rights to which the protection provided by the clause applies include rights conferred by other legislation that applies for minimum wage purposes by virtue of the Bill—for example, the legislation covering the agricultural wages regimes or regulations made under the Bill—as well as rights conferred directly by the Bill.
I hope that hon. Members will not feel short-changed by my shortened version of the reasons behind the amendments and will accept them as minor technical amendments.

Mr. Boswell: I rise not in retaliation for the Minister's foreshortening of his explanation, but to seek an explanation on amendment No. 25. I fear that 1 am ignorant of the nicer points of the arrangements for Orders in Council and drafting. Clause 42(3) provides that
An Order in Council under this section—
(a) may make different provision for different cases".
The Minister has vehemently resisted the thoughtful provision inserted in another place for some general powers of exclusion, which we debated earlier. We are now dealing with a more precise shrinking of his area of


discretion by not allowing an Order in Council—in the context of offshore employment—to make different provision for different cases.
The only conclusion that I can produce by way of explanation is that Orders in Council probably cannot make provision for different cases—or, to put it another way, if the cases differ, differing Orders in Council need to be made for them. As I am puzzled on that score, it would be helpful if the Minister would clarify what is going on.

Mr. McCartney: I shall assist the hon. Gentleman. He is talking about the effect of clause 42(3), which provides that
An Order in Council under this section"—
applying to offshore workers
(a) may make different provision for different cases".
Counsel has pointed out that that is unnecessary because clause 51(1) provides that
any power conferred by this Act to make an Order in Council … includes power … to make different provision for different cases".
We are therefore deleting paragraph (a) of clause 42(3), thus removing a duplication. I apologise for including such a duplication in the first place, but now we are taking it away. Better late than never.

Mr. Hammond: Can the Minister turn his attention to Lords amendment No. 28 and explain why it is proposed to leave out the words "in writing"? It seems to me normal that a Secretary of State would give notice in writing, and I cannot envisage a situation in which he or she would want to give notice other than in writing.

Mr. McCartney: rose—

Mr. Deputy Speaker: Order. Before the Minister replies, may I suggest that hon. Gentlemen should allow the Minister to finish a reply before rising to their feet. It is tidier and gives a better flow to what is said.

Mr. McCartney: I think that the hon. Gentleman has raised an issue not covered by the amendments. However, in the interests of people who are following the Bill, I shall read what he has said in Hansard, reflect on it and write to the hon. Gentleman.

Lords amendment agreed to.

Lords amendments Nos. 20 to 22 agreed to.

Lords amendment: No. 23, in page 20, line 30, at end insert—
("(6) The Department of Economic Development may by order repeal subsection (5) above and this subsection.")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 26, 27 and 36.

Mr. McCartney: I hope that we can deal with the group quickly. The purpose of these highly technical amendments is to reflect changes in the treatment of dismissal procedure agreements made by the Employment

Rights (Dispute Resolution) Act 1998 as they affect the protection of employees in Northern Ireland against unfair dismissal for asserting their rights under the Bill.
Lords amendment No. 23 provides a power, in a new subsection (6) of clause 26, for the Department of Economic Development in Northern Ireland to make an order to repeal subsection (5), as well as the new subsection (6) itself. That will ensure that employees in Northern Ireland are protected against unfair dismissal for asserting their rights under the Bill.

Mr. Boswell: Why does giving a Government Department power to repeal a piece of legislation help to safeguard employment rights? Given that the legislation in question is supposed to protect employment rights, a power to take them away seems a little odd. I am sure that there is a legitimate explanation, but I should like to hear it.

Mr. McCartney: All that we are doing is keeping consistency throughout the Bill as it relates to other parts of the United Kingdom. The hon. Gentleman knows about the special nature of Northern Ireland, and the amendment takes account of that—no more, no less.

Lords amendment agreed to.

Clause 38

HOUSE OF LORDS STAFF

Lords amendment: No. 24, in page 25, line 17, leave out ("contract of employment") and insert ("worker's contract")

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.
Amendment No. 24 relates to clause 38, which applies the Bill to staff of the House. Before the amendment, clause 38 applied only to such staff who are employees—staff with a contract of employment with the Corporate Officer of the House.
I should say at the outset that the amendment has the same effect as a similar amendment tabled by the Opposition in another place, but then withdrawn. Both amendments reflect concern raised by some Opposition Members during consideration of the clause in Committee. I have no hesitation in acknowledging that fact—it is nice to welcome, and act on, constructive comments when we receive them.
The clause was originally drafted to reflect the current reality, confirmed by the House authorities, that all staff in the other place have employment contracts. However, partly in the light of the views expressed in another place, the Government have reflected further on the clause. In particular, it was considered preferable to treat staff of both Houses equally. It was also considered wiser to ensure that the law not only reflects the current reality, but is capable of being applied to any reasonably likely future arrangements.
I ask the House to support the amendment. I hope that Conservative Members will agree that this is a classic case of great minds thinking alike.

Mr. Boswell: I am always a consensus person, so we are happy to agree with the Minister. We are glad that the point was spotted and we believe that the outcome is good.
I have only one concern, which I am sure has arisen simply because of a slip of the tongue by the Minister. As I understand the matter, the amendment relates solely to clause 38, which concerns the staff in another place. Clause 39 applies the same provisions to staff in the House of Commons. We do not like the Bill, but it is clearly important that the provisions should apply fairly.

Lords amendment agreed to.

Lords amendment No. 25 and Government amendment (a) thereto agreed to.

Lords amendments Nos. 26 to 28 agreed to.

Schedule 1

THE LOW PAY COMMISSION

Lords amendment: No. 29, in page 36, leave out line 26.

Mr. Ian McCartney: I beg to move, That this House does agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 30 and 31.

Mr. McCartney: The House will be pleased to know that this is the last time this evening that I shall get on my feet—[HON. MEMBERS: "Shame."] I now want officially to announce that I am on my feet.
These drafting amendments are designed to avoid wording that some may regard as offensive. Paragraph 1 of schedule 1 relates to membership of the Low Pay Commission. Paragraph 1(6)(b), unamended, permitted the Secretary of State to dismiss a commission member who was
incapacitated by physical or mental illness".
On further reflection, I believe that that formulation is best avoided. Instead, the three linked amendments achieve the result that was originally intended—that the Secretary of State can terminate the duties of any member of the commission who, for whatever reason, is unable to carry out his or her functions as a member. I trust that the House will support the amendments.

Mr. Boswell: This is positively my last response. I agree with the Minister's intentions, but I have a slight reservation about their implications, which may go further than he wanted. The amendments will mean that the objective test of physical or mental illness becomes a subjective test in the hands or opinion of the Secretary of State.
I realise that the Secretary of State—who now honours us with his presence—will want to act, as ever, reasonably and sensitively. If a commissioner were to be so incapacitated, I am sure that he would want to handle the case properly. I make that point merely because we should consider the detail of the Bill. There is a slight change in the burden of proof, and we should pause for thought on that point. At this stage of the proceedings, however—I hope that the Minister and his hon. Friends will not be disappointed—I am not disposed to test the will of the House with a Division.
The Minister has promised not to speak again, and it may be that he will not respond to what I shall now say. It would, however, be churlish of me not to conclude by thanking the Low Pay Commission and the Minister, appropriately given that we are discussing mental capacity. I have not previously had an opportunity to thank the commission for reasons that the Minister will appreciate. Indeed, we have occasionally complained about it. We do not like the context of the Bill, and we do not like the Bill itself, but we pay tribute, as has the Minister, to the commission's work. It will no doubt continue to work in future to monitor the Bill.
Secondly, when the Minister moved tonight from the class war that he fought before dinner to the conciliatory tones in which he responded to our probing of the amendments later in the evening, he showed that he has on his modest shoulders a sure head. He also, occasionally, has some sensitivity for the concerns of the Opposition, and we thank him for that.

Mr. Chidgey: I, too, wish the Minister well after the way in which he has conducted the Bill. He has—almost invariably—been courteous, has never gone off the point and has certainly been industrious. He knows of our reservations about the Bill. He has always listened to them, even when he has not accepted them. He knows that we want to see the Bill pass safely through Parliament. We look forward to engaging him again in debate when the Low Pay Commission arises under secondary legislation. I congratulate him on a job well done.

Mr. Ian McCartney: I thank the hon. Gentleman for those kind remarks. I am not so sure that I am a pussy cat. My new Secretary of State has already nicknamed me Joe Pesci. I accept the hon. Gentleman's points.
In response to the point made by the hon. Member for Daventry (Mr. Boswell), I must say that I was precise in the words that I used. The record will show the Government's clear intention to provide non-offensive wording to deal with circumstances that can sometimes be difficult. I am certain that if those circumstances arise—I hope that they do not—my right hon. Friend the Secretary of State will deal sensitively with the cases.
I must also say hallelujah, hallelujah to the hon. Gentleman. To hear someone from the Conservative Benches at last acknowledging the tremendous work of the Low Pay Commission is very welcome. I note that the shadow Secretary of State could not bear to be here to hear those words. However, I am sure that he will read them tomorrow. We intend to ensure that the commission plays an effective role in the management of our legislative programme.
I thank the hon. Member for Daventry for his kind words, but they will not help him if he makes a late application to join the commission. The Secretary of State is not quite ready to bend over so far as to allow the hon. Gentleman to be a member. However, I thank him for his kind remarks about me.
The Bill's progress has taken a long 12 months. 1 am deeply proud that a Labour Government have made so much effort to tackle at last the issue of poverty pay in Britain. I am proud, too, that I, a former low-paid worker, was given the opportunity to do that. Whatever else happens to me in politics, nothing will beat this moment,


at which I sit down in the certain knowledge that the National Minimum Wage Bill will become an Act.

Lords amendment agreed to.

Lords amendments Nos. 30 to 36 agreed to.

Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill: Mr. Clive Betts, Mr. Tim Boswell, Mr. Tim Collins, Mr. Frank Doran and Mr. Ian McCartney; Mr. Ian McCartney to be the Chairman of the Committee; Three to be the quorum of the Committee.— [Mr. Betts.]

To withdraw immediately.

Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

PETITION

Mr. Nick Centi

Ms Beverley Hughes: This is a petition from the family and friends of Mr. Nick Centi, the residents of my constituency and people in the wider locality around Manchester city centre. It concerns the brutal murder of Mr. Centi, an innocent young man who stopped to assist during an argument in the city centre. He was attempting to be a peacemaker, but was killed in a mindless incident of unprovoked violence, which the petitioners believe is all too common in our city centre. So far, 720 people have signed the petition, which reads:
The petitioners therefore request that the Secretary of State for the Home Department brings forward measures to improve the safety of city centres, strong action against those who commit violence on the streets, and tougher laws against violent crime.

To lie upon the Table.

Lloyd's Insurance Market

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]

10.31

Mr. Geoffrey Clifton-Brown: Thank you, Mr. Deputy Speaker, for allowing me this opportunity to raise the important subject of the regulation of Lloyd's insurance market. I welcome the new Economic Secretary, the hon. Member for Leicester, West (Ms Hewitt) to her position. I hope that she will have a successful term of office, and that she has received the information that I gave her predecessor and is therefore aware of the issues that I shall raise, as that will make for a more informed debate.
It is estimated that 30 per cent. of the entire capacity of the Lloyd's insurance market is controlled by offshore-domiciled companies, mostly based in Bermuda. Within a year, that could rise to a staggering figure of more than 50 per cent. I shall explore the far-reaching consequences of that rapid trend for the entire future of Lloyd's.
Mr. Stephen Walton, who was then in the Lloyd's directorate of the Department of Trade and Industry, said in an excellent wide-ranging article on Lloyd's in the spring 1997 edition of the "Financial Stability Review":
Regulations need to ensure that the policy holder protection arrangements at Lloyd's are fully effective, that the regulation system of capital provision works effectively and that the market as a whole, is seen to be a fair and a clean place to do business.
So perceptive and accurate was Mr. Walton that he was rapidly moved onwards and upwards to a new post in the Treasury.
Between 1988 and 1992, Lloyd's lost a staggering £8 billion. More than 30,000 names were disastrously affected, many being stripped of almost all their financial assets, including their homes. However, the majority were given a liferaft by the huge £11 billion rescue—the 1996 reconstruction and renewal reinsurance policy into Equitas Reinsurance.
However, it is increasingly beginning to emerge that names may have been fraudulently enticed into Lloyd's in the late 1980s, when a handful of senior Lloyd's underwriters certainly already knew of the serious long-tail environmental claims, including asbestosis in America. Problems were later compounded by the LMX spiral of multiple reinsurance of the same business. I pay tribute to my hon. Friends the Members for Runnymede and Weybridge (Mr. Hammond) and for North Shropshire (Mr. Paterson), who have been working on the detail of that problem.
There are also queries about whether the DTI, which was the regulator at that time, and the insurance directorate ever received written confirmation of the relevant Lloyd's resolution relating to the creation of Equitas. If it did not, how could the Government have had sufficient information to be able to say with confidence in the DTI press release on 4 September 1996:
adequate provisions have been made against current and possible future claims and that the minimum solvency margin that was required has been met"?


How could they have said that when they did not know which names had unconditionally accepted the reconstruction and renewal?
It is against that background that I want to raise the current trends in the Lloyd's insurance market. As a result of the enormous losses to which I have already referred, in 1994 the council of Lloyd's voted to admit corporate capital. That was on the understanding that it would be done on a spread vehicle basis, which means underwriting over a number of syndicates. That was done without consultation with the members of the society.
The Lloyd's council amended the rules again, so that those with corporate capital can now form themselves into integrated Lloyd's vehicles, buying up capacity on individual syndicates, which is then not available to the current annual venture Lloyd's names. That has caused concern in some quarters that the end of the individual annual venture Lloyd's name is in sight. Indeed, that was presaged by Max Taylor, the chairman of Lloyd's, who said in the Financial Times of 20 June:
over time the current annual venture form of participation will become a minority part of the whole Lloyds Market…and those must expect to bear the costs associated with that form of trading.
The objective of the Lloyd's council, enshrined in successive Lloyd's Acts from 1870 to 1982, is the advancement and protection of the interests of members, who were at all times understood by Parliament to be individuals participating on an annual venture basis in the Lloyd's subscription market. The whole structure of regulation of Lloyd's is on that basis
Charles Sturge, the editor of Lloyd's league table, is quoted in Post Magazine and Insurance Week on 11 June as saying:
Lloyd's is the best regulated market in the world but once the Names have gone the structure will disappear and it will be turned into a host of mini insurance companies".
That is the fundamental thrust of my speech.
Parliament passed the Lloyd's Acts to allow individual participation in the world's leading insurance market. Now there is a major risk that, next year, 50 per cent. of all Lloyd's capacity will be controlled by overseas-domiciled companies mostly based in Bermuda. A further proportion of the capacity—between 5 and 30 per cent.—will be controlled by UK-integrated Lloyd's vehicles.
If those two predictions are correct, as seems likely, what is to prevent those companies, which will cease to derive any benefit from an overly costly Lloyd's structure, from demanding that Lloyd's council dissolves itself and the society, and redistributes the new Lloyd's central fund, which currently amounts to £144,238,000, to the current underwriting members—or, more likely, ending its support for the central fund altogether?
If that happened, further far-reaching consequences would follow. The joint American trust fund, on which "finality" in the reconstruction and renewal scheme depends, could be withdrawn. That possibility alarms all the 30,000 names who were reinsured into Equitas, and it may well alarm the long-tail policyholders, who may expect to rely on their policies in the United States, and hence the United States insurance regulators.
Importantly, the Treasury, not the Department of Trade and Industry, now has responsibility for regulating Lloyd's under the Lloyd's Act 1982 and the Insurance

Companies Act 1982. In the circumstances that I have described, where the control of Lloyd's would pass outside the jurisdiction of this country to a number of large offshore insurance companies, which may be interested not in Lloyd's licences or the mutual society, but only in buying books cheaply, UK plc would lose its balance of payments advantages and, importantly, suffer reductions in receipts from corporate, income and capital gains taxes.
On 22 January 1998, the then Economic Secretary to the Treasury, the hon. Member for Airdrie and Shotts (Mrs. Liddell), in a revealing speech to the Life Insurance Association conference, said on the one hand:
These arrangements will continue to allow scope for a major role by the Council of Lloyd's in ensuring that Lloyd's continues to be well-regulated.
However, she must have considered that that was improbable, because she continued on the other hand:
Policies underwritten at Lloyd's should enjoy the benefits of the same kind of supervisory regime as those with policies issued by other insurers … I intend that the Financial Services Act will have … much more extensive supervisory powers in relation to Lloyd's … enhancing powers of intervention … authorisation of managing agents … direct authorisation and supervision of the Members … capacity auctions will be overseen.
In other words, she had in mind a very tough regulatory regime, which she would have had in mind only if she did not believe that the current self-regulation of Lloyd's was working properly.
The comments by the then Economic Secretary sit oddly at variance with today's announcement of the closing of the Insurance Brokers Registration Council, without the announcement of any statutory replacement. That is one of the most important things that I shall say tonight. We have just had the publication of the Financial Services Bill, a huge Bill extending to more than 250 clauses. It is unlikely, therefore, that the Bill will be passed into law for at least a year. By that time, it may well be too late—the Society of Lloyd's, as such, may by then be sliding into oblivion, along with the protection of past and present names and corporate capital. In the regulatory vacuum, many agents will make fortunes at the expense of their principals.
My crucial question to the Minister tonight is: in the vacuum before the Financial Services Act comes into force, should not urgent action be taken to protect the future of the Society of Lloyd's, and to address the balance of advantage between past and present individual names in relation to the dedicated corporate capital increasingly being employed at Lloyd's?
I hope that the Minister will acknowledge that those are serious, profound and far-reaching issues, which will affect not only the regulation of Lloyd's and the Society of Lloyd's but the insurance market in the City of London, and which will have further knock-on effects. I hope that she will be able to give me some interesting answers tonight. I look forward to hearing what she has to say.

The Economic Secretary to the Treasury (Ms Patricia Hewitt): 1 thank the hon. Member for Cotswold (Mr. Clifton-Brown) for his kind remarks and his welcome to me at the Dispatch Box. I also thank him for raising this extremely important issue in the House tonight, and I congratulate him on his success in obtaining


the debate. I am especially grateful to him for giving me notice of the points that he wished to raise; that is especially helpful to a new Minister. I appear to be the first new Minister in the current round of Government changes to speak in an Adjournment debate.
I also take this opportunity to pay a very warm tribute to my predecessor, my hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell). She was, if I may coin a phrase, tough on pension mis-selling and tough on the causes of pension mis-selling. I shall follow her excellent example. I wish her well—as do all my hon. Friends—in her new portfolio.
I turn to the extremely important issues that the hon. Gentleman has raised. Reform of the regulation of Lloyd's is long overdue. Lloyd's itself has recognised the need for stronger independent oversight, and the Government announced in January their proposals to provide that oversight through the new Financial Services Authority. Those proposals, like the rest of our reforms, will create a modern and flexible system of independent statutory regulation, capable of coping with the radical changes that will affect all financial markets. We will publish the financial services legislation, in draft, later this week and consult extensively on that draft legislation. I have no doubt that the hon. Gentleman and his colleagues will wish to comment during that consultation period. The hon. Gentleman referred to Stephen Walton, who is now a member of the team that has been preparing that legislation.
As hon. Members will know, for most of its long history, Lloyd's has been a successful part of this country's financial services industry, making an important contribution to the economy and the balance of payments. Indeed, only a few weeks ago, I had the pleasure of meeting Eric Harnmouthe and his colleagues at a very helpful briefing that was arranged for relatively new Members of Parliament to inform us about the Lloyd's position. I was obviously not aware then that I would be rising to respond to this Adjournment debate so soon after that briefing.
As the hon. Gentleman said, in the late 1980s and early 1990s, Lloyd's was hit by an unprecedented financial crisis, suffering losses of £8 billion between 1988 and 1992. The causes of that crisis have been well analysed. They were primarily a combination of both natural and man-made disasters, but they were certainly exacerbated by some bad underwriting decisions and practices. I am aware that some names have made allegations of fraud. The Serious Fraud Office has reviewed very substantial amounts of material put forward by those names, and has found no evidence to support their allegations. If the hon. Gentleman or other hon. Members have any new evidence, I shall of course be happy to pass it on. I am conscious of the fact that many names were hit very hard. The vast majority shouldered their losses honourably, and I am pleased to say that the legitimate claims of policyholders have continued to be met in full.
Lloyd's responded to the disastrous losses with its reconstruction and renewal plan, which involved the creation of a new insurer, Equitas, to reinsure the old liabilities. Equitas's provisions for future claims were set after a massive exercise by consulting actuaries, and this was reviewed in detail by the Government Actuary's Department before Equitas was authorised to begin operations. Nothing has happened since then to suggest that the provisions were inadequate; nor does the funding

of Equitas depend on any annual contribution from Lloyd's. In the almost two years since it began operations, Equitas has made extremely encouraging progress—although of course there is still a long way to go.
Since reconstruction and renewal, Lloyd's has shown considerable vigour in returning to profitability and renewed financial strength, as shown by the ratings that it has received from major independent agencies. As the hon. Gentleman has pointed out, that has been accompanied by some quite profound changes at Lloyd's. Corporate capital has been admitted, and now accounts for 60 per cent. of Lloyd's capacity. Some of that represents names converting to trade with limited liability, but some is from overseas, including the major insurance centres of the United States of America and Bermuda.
The involvement of overseas capital providers with Lloyd's is testimony to the continued strengths of the market and there is every sign that they wish to maintain and develop those strengths. One strength of the Lloyd's market is the common security for all Lloyd's policies that is underpinned by the central fund. The council of Lloyd's has reaffirmed its commitment to common security, which is the basis for the system of licences that Lloyd's holds to trade in world markets.
As hon. Members will know, Lloyd's has been largely self-regulating under the Lloyd's Acts. As the hon. Gentleman rightly said, the Treasury supervises its solvency under the Insurance Companies Act 1982, but less extensively than for insurance companies. Nevertheless, one requirement of that Act is that all premiums have to be paid into trust funds, with deeds approved by the Treasury. There is no question of the joint asset trust fund, or any other trust fund, being wound up without the Treasury's approval, and I can confirm that no such proposal has been made to us.
Since the crisis, Lloyd's has greatly improved its own regulation, which today is generally acknowledged to be in good shape, but we need to ensure that that standard is maintained. More fundamentally, we need to build a modern system of regulation, with proper statutory oversight, capable of responding to whatever future lies ahead. Regulation must be one step ahead of change, not one step behind, and Lloyd's, like the Government, believes that businesses that are well regulated, and seen to be so, will be in a better position to compete in global markets.
The first priority of all insurance regulation is the protection of policyholders. As the Government announced in January, we believe that holders of policies written at Lloyd's should enjoy the benefits of the same kind of supervisory regime as those with policies issued by other insurers. That is why we intend to give the FSA much more extensive prudential supervision powers over Lloyd's. Those will be more like the powers that it will have for insurance companies, including checks on key individuals and comparable powers of intervention and discipline. They will also include a requirement for FSA authorisation of managing agents, the people who are responsible for running underwriting syndicates. We also intend that the FSA should be able to authorise and regulate Lloyd's members direct, if it considers that necessary in the future.
Those powers are intended to give the FSA flexibility to cope with whatever may be the future shape of Lloyd's in a rapidly changing global financial services


marketplace. If Lloyd's were ever to become simply a group of insurance companies, with no common security, each one could be regulated like a normal insurance company—something with which all insurance regulators are familiar. If a diverse market continues, with common security, that will be reflected in its regulation. Whatever happens, we are determined that the security of policyholders should not be compromised.
I come now to capital providers. Members' agents advise members of Lloyd's in which syndicates they should participate. Their activity—advising names and potential names—is very like that of financial advisers, and we therefore propose that they should be authorised and regulated by the FSA. That will give increased protection to members of Lloyd's, some of whom have suffered from bad advice in the past.
Of course, the main risk to members is the risk to which they are exposed through the contracts of insurance which they underwrite. The enhanced prudential supervision arrangements which I mentioned should help to reduce those risks, but insurance is inherently about risk, and those who choose to trade in it must accept that. We do not intend to provide protection against underwriting losses, over and above that needed to give security to policyholders.

r. Clifton-Brown: The thrust of my whole speech was that the time lapse between now and when the FSA comes into operation could be a year or more. Meanwhile, matters need to be investigated under the present regulatory regime. Will the Minister undertake to have a thorough look at all the issues that I have raised this evening? Will she assure us, in particular, that if an application is made to wind up the society of Lloyd's, the Government will not allow the joint American trust fund to be wound up until the names under reconstruction and renewal have been properly and adequately considered?

s Hewitt: I thank the hon. Gentleman for that intervention. I was about to deal with his point about the transition period before the new Act comes into effect. My officials and the FSA are already in active discussion with Lloyd's about how the new regime will work and how the transition should be managed. All those concerned are aware of the danger that regulatory attention might slip in the transition period, and will work closely together to ensure that that does not happen. I shall happily undertake to write to the hon. Gentleman in more detail on the points that he raised. Clearly, if a proposal were made to wind up the joint trust fund, we would have to look at it, but, as I said, no such proposal has been made.
I should like to say something about capacity auctions, in which the hon. Gentleman is interested. Participation in a syndicate recently moved from being a privilege to a right, with the result that a market has developed in trading capacity on different syndicates. That market currently operates through a series of auctions run by the corporation of Lloyd's. In some

ways, that market is similar to markets regulated under the Financial Services Act 1986, and I propose that the FSA should have new powers Over Lloyd's.
Questions have been raised recently about whether advice given to names wishing to sell their capacity in the auctions has been wholly impartial and in the best interests of names. I am reassured to see that Lloyd's own regulatory division has taken up the issue and reminded agents of their duties and obligations in giving best advice and avoiding conflicts of interest.
An important feature of the Lloyd's market is the part played by the Lloyd's broker, who acts on behalf of a client in helping to obtain insurance. I should like to touch briefly on insurance broker regulation. The hon. Gentleman mentioned today's decision on the Insurance Brokers Registration Council, which was set up by the Insurance Brokers (Registration) Act 1977. As he knows, we have consulted the industry, Lloyd's and the IBRC on whether there is a continuing need for that form of regulation. He will see from the draft Bill that we are building on the consensus that has been arrived at that, although the IBRC has provided a valuable service in the past, circumstances have changed and regulation needs to change to reflect that and to build on the IBRC's work.
The arrangements that I have described, which will be set out in detail in the draft Bill, will continue to allow scope for a major role for the council of Lloyd's in ensuring that Lloyd's continues to be a well-regulated, successful and important part of the UK's financial services industry. That industry is an important part of wealth creation, and we are determined, through effective, flexible and modern regulation, to ensure that Britain's financial services industry, particularly the City of London, remains pre-eminent within the rapidly changing global market.

Mr. Clifton-Brown: If more than 50 per cent. of underwriting capacity is controlled by offshore, Bermuda-based companies, how can the Minister be so confident that she will be able to regulate and maintain the Lloyd's market in London?

Ms Hewitt: It is not for the Government to tell Lloyd's, or any other business, how it should raise capital. Our responsibility, which we take extremely seriously, is to ensure that there is good regulation which provides proper security for policyholders and advice of an appropriate quality for capital providers.
As the hon. Gentleman said, the financial services marketplace is global and changing rapidly. I hope that it is not the policy of the official Opposition that we should venture into some kind of protectionism in financial services or any other industry.

Mr. John Burnett: On behalf of Liberal Democrat Members, I congratulate the Minister on her appointment. I am diverting the question slightly, but, in hindsight, would the hon. Member for Cotswold (Mr. Clifton-Brown) have chosen to be a Lloyd's name with limited or unlimited liability?

Ms Hewitt: I thank the hon. Gentleman for his kind remarks, but his question should be addressed to the hon. Member for Cotswold. Happily, it is not an issue on which the Government have to advise him.
The arrangements that I have set out, which we shall implement through the Act after consultation with Lloyd's, will ensure the strong and successful regulation of Lloyd's. In that regulation, we shall reflect the special role of the council of Lloyd's in controlling the affairs of the society and the powers available to it in doing so.
My officials, and their colleagues in the FSA, are in active discussion with Lloyd's about how those arrangements will be operated in practice to deliver strong and cost-effective regulation. As a Government, we are committed to reform—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at one minute past Eleven 0'clock.